The Hidden Cost of Some Personal Injury Claims
Imagine winning your compensation claim — and still losing 20% (on average) of your compensation to pay for the costs of running your claim.
Winning a case should mean keeping all – or almost all – of the compensation, but when you instruct a national law firm, you could “win and still lose”.
So why is this the case?
“No win–no fee” is the way solicitors run most Personal Injury claims in Scotland today. (Although civil legal aid is still available for personal injury claims, if you qualify financially).
Certainly, no win-no fee is how bigger, national firms tend to do things these days.
It is not enough for your solicitor to agree only to get paid for their work at the end of case and only if you win. If you lose the claim, you could have responsibility for the other side’s costs running to many thousands of pounds.
Under no win–no fee, in order properly to safeguard your interests, it is important that your solicitor should take out some form of “After the Event” Insurance to protect you from that risk.
If the claim fails and there are costs to pay to the other side, the insurance pays them.
Some larger, national firms of solicitors have created their own claims funding companies to fulfil the insurance function.
If the claim succeeds, you will be awarded compensation and your solicitor will be entitled to expenses (costs) from the other side as well. The costs are paid in addition to the compensation and the scale on which they are paid varies according to whether your claim succeeds before or after the raising of a court action.
For some solicitors, the recovered costs are never enough to pay all the fees you have incurred to them. They will say they should be rewarded for the risk they have taken in running your claim no win–no fee by an entitlement to a Success Fee in addition to the basic fee recovered from the other side.
If the solicitor has taken out After the Event insurance, the cost of that is generally only payable in successful cases and the premium is between £100 and £3,500 in most cases, depending on the type of accident you had and the final value of the claim.
Where the solicitor’s firm has an associated claims funding company, you will have agreed at the outset on various percentages which will apply in calculating what is due to be paid to that company if your claim succeeds. The company has borne the risk of the costs if your claim had failed and it will usually have funded all the outlays for the claim – expert medical report costs, for example – as it progressed.
There are rules about Success Fees and, in Scotland, these cannot exceed 20% of the first £100,000 of your compensation if your personal injury claim is successful.
The majority of Personal Injury claims are worth less than £100,000.
At Grigor & Young / Moray Claims we protect our no win–no fee Personal Injury claim clients by means of After the Event insurance and where our client is Moray-based or had their accident in Moray, in most cases, we will restirct the Success Fee to a maximum of 10% of compensation, which compares favourably with other providers of these services.
Would a national firm do a better job than a local firm like Grigor & Young?
Provided the local firm has solicitors with the necessary experience and Accredited Expertise in Personal Injury Law, a national firm will probably not do a better job than a local firm.
They would be as good as each other, on average.
As you’ll appreciate, there’s no way to test that theory or demonstrate a difference: each claim can only be run once and you can’t have an “A Test” (local) and a “B test” (national) and see which one produces the most compensation.
How can we do claims “for nothing” (or more cheaply to you than others)?
It’s because insurers will pay solicitors’ fees in successful cases according to a scale and that’s paid in addition to the client’s compensation.
With national firms, they say that the fee from the insurer is generally not enough, so they have to take some of the compensation too. We agree that that is often the case, based on the standardised, percentage-based level of recovery of fees from insurers as compared with the significant amount of time and effort required in most personal injury claims. A “rule of thumb” has developed whereby national law firms tend to charge a 20% Success Fee to their personal injury clients.
For us, if it’s a local Moray client, there are economies for us in how easy it is to investigate the accident (we have “local knowledge”) and how easy it is to litigate the claim , if necessary. Elgin Sheriff Court is 5 minutes’ walk from our office.
The cost of the After the Event insurance is one we are willing to absorb. What we will generally do is charge a 10% Success Fee, which is about half what would other firms would charge, on average. Coupled with us meeting the cost of the after-the-event insurance, we consider that these are favourable factors which differentiate us from our competitors in this field.
For more information about this issue, see this article on our Moray Claims website.
Why don’t we say that ALL our clients always get to keep all their money?
Why the typical lawyer vagueness and why not say that, as a Personal Injury client of Grigor & Young / Moray Claims “you NEVER lose anything”?
If you are a legally-aided client, you never lose anything, so that’s clear.
With no win-no fee, unfortunately, there are too many variables.
We have determined (from 2024) that we can no longer run no win-no fee cases in a way which guarantees clients will keep 100% of their compensation. Our ‘going rate’ will be a Success Fee of 10% in no win-no fee cases.
Additonally, more serious / valuable cases tend not to be litigated in the Sheriff Court but in the Court of Session (the highest civil court in Scotland).
The Court of Session sits only in Edinburgh.
In Court of Session cases, we need an Edinburgh solicitor too and an advocate (barrister).
Those things take “cost capping” out of our control and you, as our client, will usually lose some of your compensation to pay legal costs – typically, that will be at the ‘maximum’ Success Fee level of 20%. If we agree with you to raise proceedings in the Court of Session, therefore, it will be because that is the best forum to choose, based on a number of considerations (including, but not limited to, the best way to maximise the value of your claim in terms of how much you receive in your hands at the end of the claim).
Other benefits to you
There are other benefits as well: you don’t have to deal with someone over the phone or via email.
You can see and meet with us – and get a feeling for who we are – instead of having to deal with us entirely remotely.
How we can help
We are best placed to help you if you live in (or close to) Moray or had your accident in Moray.
Feel free to contact Peter Brash or Marie Morrison on 01343 544077 or send us a Free Online Enquiry.
Initial enquiries are free of charge and without obligation to take matters further.
If we proceed with a claim for you and it is unsuccessful, there will be no charges to you.
If you proceed with a successful claim through us, as we’ve said, we will minimise the cost to you as far as possible. You may get to keep 100% of your compensation. In many cases, you will lose 10% of your compensation to pay legal costs. In a few cases, the percentage loss will be higher but will never exceed 20% of your compensation. All of these things will be discussed and agreed with you in advance.
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Links you might like
This article on our Moray Claims website discusses the relative pros and cons of the 3 main funding methods for personal injury claims in Scotland: no win-no fee; legal aid; and legal expenses insurance.