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Legal Costs in Personal Injury and Clinical Negligence Claims

15/03/2021

Author: Bengi Karakus

Accidents and Injuries, Clinical Negligence

Hatch Brenner Trainee Solicitor Bengi Karakus

Legal Costs in Personal Injury and Clinical Negligence Claims

Legal Costs in Personal Injury and Clinical Negligence Claims

Before commencing with a legal claim for a Personal Injury you may have suffered, or a Clinical Negligence legal claim, you are likely to have questions regarding how the legal costs process works, and how you might pay any legal costs arising out of the claim.

There are several different ways of paying legal costs and insuring against your liability in covering any legal costs from the ‘other side’ or defendant in your case.

Hatch Brenner Trainee Solicitor Bengi Karakus has outlined the main funding options below including Legal Expenses Insurance and Conditional Fee Agreements. We are more than happy to offer personal advice into this area as the best option will vary depending on your particular circumstances. Call 01603 660 811 or email info@hatchbrenner.co.uk

Legal Expenses Insurance

Clients may buy Legal Expenses Insurance to cover legal costs they might incur when pursuing disputes about personal injury, contracts for goods or services, property or employment matters. It is possible to buy standalone legal expenses insurance or alternatively, most policies can be added to home or car insurance as optional extras.

There is always a limit to how much you can claim under the Legal Expenses Insurance policy which is usually £50,000 or £100,000.

Freedom to instruct a solicitor of your choice

Under the Insurance Companies (Legal Expenses Insurance) Regulations Act 1990, you can choose the solicitor you want to assist you with your claim, rather than being forced to use a solicitor appointed by your insurer. As a policyholder, you should be able to choose your own solicitor from the point that legal proceedings need to commence. This is when negotiations have failed and it has been decided by the solicitor involved, who may be a panel solicitor of the insurers, that it is necessary to issue proceedings to progress the legal case.

In the Court of Appeal decision in the case Brown-Quinn & Anor v Equity Syndicate Management Ltd & Anor [2012] EWCA Civ 1633, the legal position for insurance companies in restricting the fees payable to a non-panel solicitor must not be so low as to render the policyholder’s freedom of choice meaningless. Any restriction on remuneration must therefore be made clear at the outset, fair and not misleading within the policy to ensure the customer is aware of any limitation.

These regulations provide that the insurance company must afford the policy holder the right to “entrust the defence of his interests” to a lawyer of his or her choice.

If you have an insurance policy which gives you the benefit of Legal Expenses Insurance, you should ask either your insurer directly to confirm that they are happy for you to instruct your own solicitor or contact your solicitor who will approach the insurance company directly where there is the prospect of work for them.

Conditional Fee Agreements

What is a CFA?

A Conditional Fee Agreement (or CFA) is an agreement with a legal representative which provides for his or her fees and expenses, or any part of them, to be paid only in certain circumstances – which is usually only if the client wins the case.

How does a CFA work?

A CFA is a legal funding arrangement where you only pay for your lawyers’ work on the condition that you win your case and you receive compensation. In the event that your case is unsuccessful, you are therefore not left with a bill for legal work.

The changes to CFAs implemented in April 2013 by the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) 2012 means that the ‘success fee’ element of your legal costs can no longer be recovered from the defendant. The success fee is therefore payable via a deduction from your compensation (your damages payable when you win your case).

In Personal Injury claims, no deduction of a success fee can be more than 25% of your total damages payment.

There are exceptional circumstances whereby you may be ordered by court to pay legal costs incurred in your case if it is found by the court that:

  • You had no reasonable grounds to make a claim in the first place
  • Your claim was an exploitation of the court and its procedures
  • Your general behaviour during the case is judged as dishonest
  • It is discovered that you are claiming to financially benefit somebody else

Success Fees

A Success Fee is the added fee that a solicitor becomes entitled to under a CFA if your case is successful.

The optimum success fee your solicitor can charge you is capped at 25%. This means that under the No Win No Fee arrangement, your solicitor is entitled to recover their legal costs from the damages payable to you in the event you win your claim.

The success fee is seen as mitigating the risk of failure as your solicitor, in assessing the merits of your personal injury or clinical negligence claim, takes on the risk of not recovering any of their legal costs incurred in working on your matter if your claim is not successful.

Compensation – how is it calculated

Your compensation is calculated by adding together General Damages, awarded for pain, suffering and loss of amenity (PSLA) and Special Damages, awarded for any financial losses or costs you have incurred.

Calculating ‘pain and suffering’

Pain, suffering and loss of amenity (PSLA) is the term for the impact any injury or illness has had on your life. Your solicitor will start the calculation by referring to the tables published by the Judicial College.

The Judicial College Guidelines are updated annually which provides the starting point for solicitors when calculating your compensation.

Special Damages

Special Damages are awarded for financial losses and expenses incurred as a result of your injury. This will include your loss of earnings, cost of medical treatments and any other expenses incurred as a result of the accident such as cost of care, travel costs and costs of adapting your home or car.

Plus 10% Rule

Under a CFA, the Judicial College Guidelines provide that your final compensation award will be increased by 10% to offset the impact of the success fee deduction.

Split Liability Deduction – Contributory Negligence

If you were to partly blame for the accident, you can usually still claim however, under the Judicial College Guidelines, your compensation will be reduced. Your solicitor will negotiate and apportion, as a percentage, the blame between you and the defendant. The percentage is used to calculate how much your award will be reduced.

For example, if you were 50% responsible for your injuries, you would receive 50% less compensation.

Read more: Compensation

Read more: Personal Injury FAQs

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