Have you recently accepted a personal injury settlement and believe that your solicitors have deducted more than they should have from your settlement? Have you paid an insurance or success fee from your damages and believe that it has been incorrectly calculated? Did you have some form of legal expenses insurance which was not considered by your solicitors? Then we may be able to assist.
When you instruct a solicitor they are under a professional obligation to give to you the best possible costs advice.
Under a no-win, no-fee agreement (a conditional fee agreement), if the case is lost, then a solicitor receives no payment for the work which they have undertaken in relation to your case. In return for taking this risk and funding your case for what may be a long period of time without any income or guarantee of success, usually your solicitor will agree with you that if the case is won, then on top of their normal legal fees which the opponent pays, they will also receive a "Success Fee". Since 1st April 2013, this success fee is deducted from the compensation (damages) you receive.
The level of success fee is based upon the solicitors’ assessment of the risk of not achieving success. The solicitors’ assessment of risk will include considering all relevant factors; including the merits and value of the claim, the likelihood of settlement, the level of costs likely to be incurred and the information and documentation available. In personal injury cases, there is a restriction on the level of success fee that can be charged, the success fee is subject to a cap of 25% of damages (excluding damages for future pecuniary loss). A solicitor can therefore be paid a success fee of up to 100% of their normal fees for running your case, but this is capped at 25% of the damages you have been awarded.
In practical terms, when contemplating charging a success fee that is payable out of damages a solicitor should investigate the funding options open to you, examine and compare the benefits and bad points of each and explain these to you in sufficient detail so that you are able to make an informed choice as to whether to proceed with the conditional fee agreement or not.
It is not enough that you have agreed to pay the success fee at 25%, the basis for the charging you must be explained to you and why and how it has been calculated. If the solicitor cannot justify the deduction and explain it, then this may allow you to challenge it.
An insurance policy can be taken out to cover the expenses/disbursements incurred in pursuing your claim and your opponent's legal costs. This is usually termed After Event Insurance (ATE). The decision to take an insurance policy will depend upon each individual case and you should have been advised whether to take out a policy at the outset. You should be advised at the outset how much will be payable by you and the circumstances in which it becomes payable.
You may have already had legal expenses insurance. Many individuals have cover with their home or car insurance and it is worthwhile checking these policies before taking out further insurance. If a solicitor has not checked whether you have the benefit of existing legal expenses insurance (usually termed Before the Event/ BTE insurance) and takes out a further policy, you may be able to recover the amount of any premium paid from them.
Recent case law A and M v Royal Mail Group, highlighted that solicitors need to ensure they are completing a risk assessment and considering the appropriate success fee when initially taking on a matter. If the client had a source of alternative funding, such as legal cover through their home insurance or car insurance, then fees for insurance would almost certainly be disallowed by the Court, meaning the solicitors and not the client would have to pay this amount.
There have been a growing number of professional negligence claims in this area.
If you believe that you have been wrongly charged a success or ATE fee, please get in touch today..