What is a Conditional Fee Agreement?
A conditional fee agreement (CFA) is the formal name for a no win no fee agreement. It is a legally binding contract between you and…
Read moreWhat is a success fee in personal injury claims?
A success fee in personal injury claims is a percentage of the compensation awarded that is deducted by your solicitor if they win your case.
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What is a Success Fee in Personal Injury Claims?
To give everyone access to legal representation, most personal injury claims are funded by a conditional fee agreement (CFA). While a CFA significantly reduces your financial risk, it also means that you will have to pay a success fee to your solicitor if they win your case.
The success fee in personal injury claims is deducted from your compensation payment and is pre-agreed at the outset. By law, it is capped at 25% of your general damages and past financial losses, and it covers the solicitor’s work and the risk they took by offering you a CFA.
This guide explains what success fees are in personal injury claims, why they exist, how they are calculated, and your legal right to compensation.
By submitting this form you agree to be contacted by our partners. Find out how we handle your data in our privacy policy. With no win no fee you typically pay 25% of your compensation if your claim is successful, but the fee can vary. Termination fees may apply if you fail to co-operate with your solicitor.
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What is a personal injury claim?
A personal injury claim is the legal process of seeking compensation for injuries and losses caused by someone else’s negligence. Such claims can arise from road accidents, medical negligence, workplace accidents and various other scenarios.
To be successful, the claimant must prove that the defendant owed them a legal duty of care which was breached, causing their injury. This can be done with the help of evidence such as medical records, accident reports, photographs and witness statements.
Many people worry about the risk of hiring a solicitor and starting a legal claim. To give everyone access to justice with no financial risks, no win no fee agreements, formally known as conditional fee agreements, were introduced in 1990. We explain how these work below.
How does a No Win No Fee claim work?
Having to pay a personal injury lawyer to claim compensation without the certainty of winning the case would discourage many claimants from taking legal action. This is why many solicitors offer a no win no fee service.
Once your solicitor agrees to take on your case, you will sign a conditional fee agreement. This is a contract between the two of you, which states that:
- You don’t need to pay anything upfront to start the claim.
- If your claim is successful, your solicitor will be entitled to deduct a success fee from your compensation.
- If your claim is unsuccessful, you do not have to pay them a single penny.
The CFA will also include all the services your solicitor will provide for you, such as gathering supporting proof, preparing your case, handling all communication with the defendant and more.
What are success fees in personal injury claims?
In a personal injury claim, a success fee is a percentage of the compensation awarded to you that you will pay to your solicitor if they win your case. This fee reflects the risk they took by offering you a CFA and not being able to recover their costs if your case is lost.
Under the Conditional Fee Agreements Order 2013, the success fee is legally capped at 25% of the compensation awarded for general damages and past financial losses.
You will negotiate from the beginning the specific percentage that you will pay to your solicitor if they win your claim, based on factors such as the complexity and risk of the case.
The success fee percentage that your solicitor is entitled to will be stated clearly in your CFA. This way, you know in advance how much will be deducted from your compensation award.
Which types of claims do success fees apply to?
Success fees apply to any personal injury claims brought under a no win no fee agreement. These include, but are not limited to:
- Road traffic accident claims involving cars, bicycles, motorbikes or pedestrians.
- Workplace accident claims, including falls from height, machinery accidents or manual handling injuries.
- Medical negligence claims for surgical errors, misdiagnosis or prescription errors.
- Accidents in public places, such as slips, trips and falls and being hit by falling objects.
- Industrial disease claims for conditions such as asthma, dermatitis or mesothelioma.
- Criminal injury claims following assaults and other criminal acts.
Who pays the success fee to the solicitor?
Before 2013, your solicitor could recover their success fee from the other party, and you could keep 100% of the compensation awarded to you.
But the Legal Aid, Sentencing and Punishment of Offenders Act 2012 came into effect in 2013, stating that the success fee must be covered by the claimant from then on.
However, you will not pay this out of pocket. Instead, it will be deducted directly from your compensation once your case has been settled and the damages have been awarded. If your case is lost, you do not owe your solicitor this fee.
Do No Win No Fee solicitors always take a 25% success fee?
No win no fee solicitors do not always take 25% of your compensation as their success fee. The specific amount they will deduct will be agreed upon at the outset of the case and will depend upon its complexity and your chances of success.
The success fee was meant to motivate solicitors to compete for business by lowering the percentage they would take from your payment.
However, due to the high risk involved in a CFA and the complexity of many cases, it is not unusual for them to go along with the 25% cap allowed by the Ministry of Justice. If your claim is unsuccessful, your solicitor will not be able to recover their legal expenses.
Do success fees apply to future financial losses?
No, success fees do not apply to future financial losses in personal injury claims. By law, your solicitor can only withhold their success fee from your general damages (awarded for pain, suffering and loss of amenity) and past financial losses, such as lost wages and medical bills already incurred.
This means that you will keep 100% of any compensation awarded for future needs and losses, such as ongoing medical treatment, long-term care or loss of earning capacity.
Furthermore, to reduce the impact and burden of the success fee, the legislation implemented a 10% increase in the general damages awarded to claimants.
Will there be other deductions from my personal injury compensation?
In addition to the success fee that you may pay your solicitor, there could be other deductions from your compensation for a personal injury, including:
- The cost of an After the Event (ATE) insurance policy. Your solicitor may advise you to take on ATE insurance to protect you against legal fees if you lose the claim, including the defendant’s legal costs. The premium is only payable if you win.
- If you win the claim, the defendant will typically have to cover all your costs and disbursements. However, you may be asked to cover any expenses that cannot be recovered from them.
Can I make a personal injury claim on a No Win No Fee basis?
The simplest way to find out if you are eligible to claim compensation is through a free consultation with a personal injury solicitor. They will be able to determine if:
- Another party owed you a legal duty of care.
- They breached this duty and caused you to suffer harm and loss.
- You are within the legal time limit to start a claim, which is generally three years.
If your case has merit, your solicitor will explain to you how the claims process works and that you will need to pay a success fee if they win compensation for you.
How much compensation could I expect to receive?
The compensation for a personal injury is calculated based on two types of damages:
- General damages cover your pain, suffering and loss of amenity (reduced quality of life and ability to enjoy daily activities).
- Special damages cover all the financial losses and expenses incurred as a result of your injury (including future losses).
According to the Judicial College guidelines, you could receive up to £493,000 for general damages, depending on the type and severity of your injuries. Special damages will be calculated based on financial documents, and their value could be much higher.
After deducting the success fee to cover the cost of your solicitor’s work and of the ATE premium, you will receive the rest of your compensation in your bank account or a personal injury trust.
What happens if I lose a No Win No Fee personal injury claim?
If you lose a no win no fee claim, you will not owe your solicitor a single penny. You only have to pay them a success fee if and when they secure compensation for your injury and losses. This protects you from the financial risk of litigation.
However, you may need to cover other costs, such as court fees, the defendant’s solicitors and disbursements such as medical reports. Your ATE insurance policy will cover all these expenses, and you will not be left out of pocket. If you lose, you don’t even have to pay the cost of the ATE premium.
Do I have to use a personal injury solicitor to make my claim?
You are not legally required to use a solicitor to make a personal injury claim. You can represent yourself, but this can be risky and significantly reduce your chances of success, especially if the defendant has legal representation.
Besides having the knowledge and expertise necessary to navigate complex legal matters, your solicitor will also:
- Offer you a 100% no win no fee agreement.
- Gather and present strong evidence to support your case.
- Arrange a free independent medical assessment to have your injuries fully assessed.
- Review your case thoroughly with you and keep you updated at every step.
- Send a letter of claim to the defendant and handle all communication with them.
- Work hard to negotiate the maximum compensation you are entitled to.
Key takeaways
A success fee in personal injury claims is the payment your solicitor receives if they win your case under a CFA. This is taken as a percentage of your compensation and reflects the risk they took by not being able to recover the cost of their work if your case is lost.
By law, the success fee is capped at 25 % of your general damages and past expenses, meaning you will always keep 100% of any future financial losses.
To learn more about success fees and how much compensation you could be entitled to, get in touch with a legal professional by calling 0800 470 0474 or using our online claim form.
By submitting this form you agree to be contacted by our partners. Find out how we handle your data in our privacy policy.
By submitting this form you agree to be contacted by our partners. Find out how we handle your data in our privacy policy.
