Why do most injury solicitors charge 25% success fees?

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Nearly all personal injury solicitors receive a success fee of 25% of a claimant's compensation. Before 2013 this was not the case. So what has changed?

What are success fees?

In most successful no win, no fee claims, claimants will pay a success fee to their solicitor.

Before the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) ame into force in 2013, success fees were paid by the defendant, meaning claimants kept 100% of their compensation. Since the law changed in April 2013, claimants on a no win, no fee agreement must pay a success fee out of their compensation.

This success fee is usually a percentage of the total compensation award or settlement. In most cases, the success fee will be 25%.

Is there any success fee competition between solicitor firms?

The legislation was expected to encourage competition between solicitors. Increased competition was intended to lead to more competitive success fees, helping injured claimants keep more of their compensation.

However, since the changes in the law, real competition has not emerged. The majority of solicitors now charge a 25% success fee. 25% is the maximum success fee allowed by the Ministry of Justice.

District judge ruling

In September 2015, a case involving two children highlighted the lack of success fee competition between solicitors.

In the case of A & Anor v Royal Mail Group [2015], District Judge Lumb intervened on solicitors costs.

Speaking about the case, Judge Lumb said it was expected that:

"the deregulation of success fees would lead to a competitive market between solicitors to offer the lowest success fees to secure the work, it is equally true to observe that this has not transpired, at least not yet.”

Judge Lumb added:

“This may be because the public have not been in a position to make an informed choice to shop around for the best deal. Until solicitors incorporate within their marketing an intention to be competitive with other firms concerning success fees Sir Rupert Jackson's aspirational forecast is unlikely to come to pass."

Why do most solicitors charge the maximum 25% success fee?

Success fees were introduced as a key part of funding a personal injury claim when Legal Aid was abolished in 2000.

Without Legal Aid, some potential claimants would have been unable to afford to take a matter to court. This situation would violate a fundamental principle of English law, instituted in the Magna Carta, giving everyone access to justice.

No win, no fee is a solution to this problem, enabling claimants of any economic background to take a matter to court without the risk of being charged solicitors fees if their claim is not successful.

Solicitors working on this basis earn nothing if the claim is unsuccessful. To compensate the solicitor for taking the risk, success fees enable the solicitor to recover more revenue for cases that they win.

Changes in the law

Before 2013, success fees were paid by the defendant, along with the claimant's other legal costs. This meant that claimants kept all of their compensation.

It was not until the legislation was introduced in 2013 that the liability to pay success fees moved from the defendant to the claimant. In most cases, other legal costs would still be paid by the defendant.

Many solicitors struggle to make a profitable business out of personal injury. To be successful, a firm must have a high case success rate and a very efficient business overall.

25% success fees are charged by most law firms simply because they need to increase revenue. The Ministry of Justice imposes a maximum success fee cap of 25%.

Read more:

Can I get legal aid in a personal injury compensation claim?

What are the lowest success fees for road traffic accident claims?

For most car, motorcycle, bicycle and pedestrian injury claims, the standard legal fees that a solicitor can recover from the defendant are capped. This cap is referred to as “fixed recoverable costs”.

These fixed costs cap means that personal injury firms are unable to carry out road traffic accident work profitably unless they also charge the maximum 25% success fee.

What are the lowest success fees for work accident claims?

The standard legal fees that a solicitor can recover from the defendant in a work accident compensation claim are also capped.

Even firms that specialise in work accident claims will be usually be unable to run a case for less than the 25% success fee.

What are the lowest success fees for medical negligence claims?

Medical and clinical negligence claims range widely in scope and complexity. Medical negligence encompasses dental negligence, misdiagnosis, GP negligence, NHS hospital negligence, cosmetic surgery, and so on.

These claims will require a specialist solicitor to ensure that:

  • the claim is handled successfully,
  • that the correct amount of compensation is calculated, and,
  • that the injured claimant's ongoing rehabilitation needs are met.

In some cases, medical negligence claims can take years to complete.

These factors can make a clinical negligence claim difficult and costly for a law firm to undertake.

Without specialist staff and ready access to medical and other experts, less-experienced firms can struggle to cover their costs, even when a compensation award is in the £10,000s or £100,000s.

The panel of expert clinical negligence solicitors have years of experience handling a wide range of claims, including for cancer misdiagnosis, wrong-site surgery, and delayed treatment.

The solicitors' depth of knowledge means that they can better assess the scope and outcome of a claim.

How can Quittance help?

Your solicitor will fight for the best possible compensation settlement for you, and the highly-experienced panel of solicitors have an excellent track record of winning injury claims.

If you have any questions, or would like to start a No Win No Fee claim, we are open 8am to 9pm weekdays, 9am to 6pm on Saturday, and 9.30am to 5pm on Sunday.

Call us FREE 0800 376 1001 or arrange a callback:

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Howard Willis, Personal injury solicitor

Author:
Howard Willis, Personal injury solicitor