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.
Certainly, it 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 not 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 £200 and £500 in most cases, depending on the type of accident you had.
Some solicitors will just ask you to pay the cost of the insurance from your compensation as the only “hidden” cost.
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 they will often have funded all the outlays for the claim – expert report costs, for example – as it progressed.
In many cases, injured people are agreeing to pay out 20% on the first £100,000 of their compensation if their 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, they get to keep all their compensation where the claim succeeds.
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”?
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 money.
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. In addition, there can be pre-agreed percentages of your compensation to be paid to the solicitors’ claims funding company.
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 in many cases.
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”?
It’s because 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 – though very often less than 10%.
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 us—and get a feeling for who we are, instead of having to deal with an army of secretaries.
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.
Initial enquiries are free of charge and without obligation to take matters further.
If you do proceed with a successful claim through us, as we’ve said, for the majority of our clients, our whole service is free of charge.
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.