Personal Injury Claims

[Fagin2021]

Is it normal practice for lawyers to take a percentage cut of compensation awards (in addition to their fees) and if so, how much?

 

[Newchodge]

Only if that was the agreement in advance. It is more normal in no win, no fee deals.

 

[Fagin2021]

Only if that was the agreement in advance. It is more normal in no win, no fee deals.

Thanks. I'm not sure I understand the principle though.

Most 'no win, no fee' lawyers only take on cases they have a reasonable expectation of winning - and these are usually settled out of court.

If the case is won or settled, the defendant's side pays their fees anyway. Why should they get extra ?

If I build an extension on your house I get paid for the work I've done - I don't expect a percentage of the increase in house value !

Do you know what a typical percentage might be - or is it the subject of negotiation ?

 

[Newchodge]

I don'y honestly know, I don't have much experience of PI, but I have a feeling they changed the rules about fees from the other side a while ago,

 

[Gyumri]

Conditional Fee Agreement Solicitors - Roythornes Solicitors

Conditional Fee Agreements (CFA) were first introduced in 1998 and subsequently modified in 2013. The core principle of a CFA is that your solicitor will only...

www.roythorne.co.uk

 

[Gyumri]

If I build an extension on your house I get paid for the work I've done - I don't expect a percentage of the increase in house value !

If you build an extension for nothing and only expect to be paid when and if the house is sold then you can also expect a percentage of the increase in house value. It's down to negotiation as was said by Newchodge above.

 

[fisicx]

If you build an extension for nothing and only expect to be paid when and if the house is sold then you can also expect a percentage of the increase in house value. It's down to negotiation as was said by Newchodge above.

That makes no sense at all. What has this to do with the question being asked.

 

[MBE2017]

My understanding is that a solicitor would work at a contracted rate, down to you both to agree.

On no win no fee, normally the work is carried out for “free”, and you get the full award.

You would probably be required to take out an insurance policy to cover the potential costs against you in the event you were to lose, plus the solicitor would tell you not to worry about their costs for working for you, since they are added to the award by the court.

 

[Newchodge]

This may help

Solicitors Fees and Payments | How To Make A Claim

All you need to know about our legal fees and payment terms.

www.thompsons.law

 

[Gyumri]

Why should they get extra ?

If I build an extension on your house I get paid for the work I've done - I don't expect a percentage of the increase in house value !

That makes no sense at all. What has this to do with the question being asked.

Do you have a better answer to Fagin's question? If my response doesn't make sense then read Fagin's question and provide your own answer that makes sense to you. Simply saying that something doesn't make sense without contributing anything yourself also makes no sense.

 

[Fagin2021]

My understanding is that a solicitor would work at a contracted rate, down to you both to agree.

On no win no fee, normally the work is carried out for “free”, and you get the full award.

You would probably be required to take out an insurance policy to cover the potential costs against you in the event you were to lose, plus the solicitor would tell you not to worry about their costs for working for you, since they are added to the award by the court.

Thanks. I suspect from the responses and the links that there is no one answer. Fees and terms will be negotiated depending on the complexity of the case (eg. medical negligence), the probability of winning (disputed versus 'bang-to-rights'), and the individual firm of lawyers.

 

[Gyumri]

And see also

Qualified one-way costs shifting (QOCS) for personal injury claims

What changed? How was the change implemented? Can the claimant lose the protection of QOCS? Is QOCS means tested? Why was the change introduced? What are the implications for commercial parties? Wh…

hsfnotes.com

 

[Fagin2021]

And see also

Qualified one-way costs shifting (QOCS) for personal injury claims

What changed? How was the change implemented? Can the claimant lose the protection of QOCS? Is QOCS means tested? Why was the change introduced? What are the implications for commercial parties? Wh…

hsfnotes.com

Interesting - I think it's clear but really needs a professional to explain it properly.

 

[smallclaimsassistance]

Interesting - I think it's clear but really needs a professional to explain it properly.

I did this for years, and left my partnership 7 years ago because of the changes made. The changes to the civil litigation and funding rules meant that, in most cases, it’s now much more difficult to investigate a case properly, if you’re acting for the claimant. You don’t get paid for the work, even if you win.

The inevitable result of that is, in almost every case, the claimant’s solicitor takes a cut of the compensation. The percentage depends on the type of case, and the firm, but it’s usually between 25 and 50%.

Also, in the majority of cases run by solicitors, they receive a fixed fee which is often insufficient to cover the work done. Hence the contribution above.

In a large proportion of cases, solicitors don’t now get paid at all, mostly RTA soft tissue injuries (not quite that simple, but you can look up the detail). In a low grade RTA injury case, the victim is on their own against the insurer. Unfair, but that’s now the law. This came in last year, and the government chose not to announce the changes, so most people will not be aware of this, until they suffer an injury.

In summary, unless you’re seriously injured, or have a med neg case, your solicitor won’t recover the cost of the work done, they’ll receive a low fixed fee, and the only way they can financially justify running the case for you is to take a substantial cut of your compensation.

This is why 100s of PI firms have closed since 2013. This situation is ongoing, and firms are still going under, as more and more firms are finding it impossible to find a viable business model. So, if this appears to be a case of stereotypical “greedy lawyers”, rest assured, it only appears that way.

No win, no fee is still offered as a contractual model, but the claimant often pays more by proportion on success than they used to, under the old rules.

Dean

 

[Fagin2021]

I did this for years, and left my partnership 7 years ago because of the changes made. The changes to the civil litigation and funding rules meant that, in most cases, it’s now much more difficult to investigate a case properly, if you’re acting for the claimant. You don’t get paid for the work, even if you win.

The inevitable result of that is, in almost every case, the claimant’s solicitor takes a cut of the compensation. The percentage depends on the type of case, and the firm, but it’s usually between 25 and 50%.

Also, in the majority of cases run by solicitors, they receive a fixed fee which is often insufficient to cover the work done. Hence the contribution above.

In a large proportion of cases, solicitors don’t now get paid at all, mostly RTA soft tissue injuries (not quite that simple, but you can look up the detail). In a low grade RTA injury case, the victim is on their own against the insurer. Unfair, but that’s now the law. This came in last year, and the government chose not to announce the changes, so most people will not be aware of this, until they suffer an injury.

In summary, unless you’re seriously injured, or have a med neg case, your solicitor won’t recover the cost of the work done, they’ll receive a low fixed fee, and the only way they can financially justify running the case for you is to take a substantial cut of your compensation.

This is why 100s of PI firms have closed since 2013. This situation is ongoing, and firms are still going under, as more and more firms are finding it impossible to find a viable business model. So, if this appears to be a case of stereotypical “greedy lawyers”, rest assured, it only appears that way.

No win, no fee is still offered as a contractual model, but the claimant often pays more by proportion on success than they used to, under the old rules.

Dean

Thank you for your input but what you've said doesn't accord at all with my own research. For example, I understand that the success fee percentage is capped at 25%.

 

[smallclaimsassistance]

Thank you for your input but what you've said doesn't accord at all with my own research. For example, I understand that the success fee percentage is capped at 25%.

That may well be the case. I’ve been out of the industry for 7 years, so I’m not as up to date on the detail as I could be.

I was answering your main question which seemed to be why should take a cut at all, if they recover their costs anyway (your “extension” example).

 

[The Resolver]

"I was answering your main question which seemed to be why should take a cut at all, if they recover their costs anyway"

Because winning (and cost recovery) is not guaranteed, They may lose the case. So they charge a success fee on top of the normal fee when they win to cover that risk. Also, the success fee element is no longer recoverable from the Defendants.

 

[Fagin2021]

After a bit of reading I think I’ve got a handle on this – but I could be wrong!

The problem is, if you ask Google “What is a success fee ?” you get a load of different, contradictory and misleading answers.

The worst answers imply that personal injury lawyers will typically charge a success fee of 25% of the compensation awarded on top of their standard fees. For example, if you are awarded £100K compensation the lawyers will take £25K.

If this is a common perception it’s not surprising that PI firms get such a bad rap – but it’s not true! This is how it really works…

If you enter into a Conditional Fee Arrangement (otherwise known as ‘No win, no Fee’) you negotiate a ‘success fee’ which could be from 0% to 100%. This fee is an ‘uplift’ on the lawyers standard fee for running your case.

It’s intended to compensate the firm for the risk of losing a case and not being able to recover their costs.

For example, if the standard fee (hours worked times hourly rate) comes to £10K and you’ve agreed a success fee of 50%, the final bill will be £15K. If the agreed success fee is 100%, the final bill will be £20K.

The success fee is likely to represent the degree of difficulty your case represents – a hotly contested case versus a ‘slam-dunk, bang-to-rights’ one.

If the case is lost, you pay nothing (no win, no fee).

If the case is won, (in the above example), the legal bill is £15K and you can claim the standard charge (£10K) from the defendant. The success fee (£5K) can’t be reclaimed from the defendant and will be deducted from your compensation.

However, the maximum that can be deducted from your compensation to cover the success fee is 25% of the total compensation. So in the above example, if you were only awarded £16K, the success fee would be capped at £4K.

I think that’s correct but if anyone knows different – please post.

As an aside, people talk about ‘winning’ a case but 95% of personal injury claims are settled out of court!

 

[Gyumri]

If the case is lost, you pay nothing (no win, no fee).

That is correct to an extent but see the link to qualified one way costs shifting above. The whole costs regime in the uk resembles a dogs dinner and simply maintains the legal industry at great expense to the public.

In Germany by comparison there are no such thing as "costs judges." Litigants pay 3 % of the value of a claim (and 3% to the winning party) and everyone knows where they stand.

Instead of spending years fighting over costs the Germans are busy making beer.