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Personal Injury Law: To Fee or Not to Fee
Posted by David Cant on June 15, 2012
2 Comments

Guest post contributed by Sarah Carling, for Injury Lawyers.

Changes in UK Law

Personal injury law and legal fee structure have seen a number of far-reaching changes in the UK over the past several decades. Without a doubt, the legal landscape has been altered, making it more important than ever for both businesses and individuals to understand their options.

Historical-Legal Background

Prior to the year 2000, Legal Aid was a viable option allowing individuals with low incomes to pursue legal recourse in personal injury cases. However, due to what many have referred to as the ambulance-chasing mentality, Legal Aid has been abolished in all but the most complex personal injury cases. As a result, Conditional Fee Agreements, reformed as part of the Access to Justice Act of 1999, have assumed an even larger role in UK law.

Fast-forward to 2012, and the UK legal system is poised for still further reform—this time as a result of LASPO [http://services.parliament.uk/bills/2010-11/legalaidsentencingandpunishmentofoffenders.html] (the Legal Aid, Sentencing and Punishment of Offenders Act), which, according to a 25 April story in the Guardian, http://www.guardian.co.uk/law/2012/apr/25/legal-aid-bill-end-ambulance-chasing-lawyers “will scrap the recoverability principle—preventing you from recovering your insurance costs and success fees from the losing side.” This is a big change all around—one whose full effects only time and experience will reveal. And for better or worse, this is the current legal environment into which all UK citizens who litigate personal injury cases have been unceremoniously thrust.

To help you make the best of these latest legal developments, the following sections describe the various ways of funding your personal injury case:

Traditional Retainers

The traditional legal retainer is one of the more common funding methods for personal injury cases and is a kind of private payment. Under this model, the client agrees to pay the solicitor an hourly rate for services rendered, in addition to the cost of disbursements, such as court fees, Barristers’ fees, police or expert reports, medical records and other similar expenses, placing the agreed-upon amount on deposit to cover these eventualities. Disbursements are often covered by claimant’s Legal Expense Insurance. Due to the widespread use of Conditional Fee Agreements, this method is becoming less common.

Conditional Fee Agreements

Conditional Fee Agreements (CFAs), popularly known as “No-Win, No-Fee” arrangements, are often misunderstood. Many mistakenly believe the term means “No-Win, No-Pay,” but this interpretation is completely inaccurate. In reality, when a litigant loses a case, whilst his solicitor will not exact legal fees, other charges will inevitably come due. The opposing party’s legal fees and the costs incurred by claimant’s legal counsel will be due and payable. If his solicitor prevails, he will then be responsible for paying the solicitor’s success fee and costs incurred, though he should be able to claim damages from his opponent. CFAs can be complex, and many people are confused by them. As with traditional retainers, Legal Expense Insurance is generally the funding method used with CFAs.

Mixed Fee Agreements

CFAs backed by alternate arrangements whereby only a portion of your solicitor’s legal fees would be conditional upon winning the case are sometimes requested by counsel to decrease risk. Should the case be lost, a mutually agreed-upon portion of your advisor’s hourly rate would be payable in any event. Should the case be won, counsel would then be entitled to the full hourly rate; however, the success rate percentage would be based only on the conditional portion of the hourly fee.

Legal Expense Insurance

Legal Expense Insurance (LEI), also called after-the-event (ATE) Insurance, can help claimants who lack sufficient funds to cover their own legal expenses and, as mentioned in the above sections, can be used in conjunction with various agreement types. Before purchasing after-the-event insurance cover, however, make certain you aren’t already covered by one of the following before-the-event insurance sources:

  • • Credit card
  • • Trade Union membership
  • • Club membership
  • • Home insurance policy
  • • Motor insurance policy

Determining which legal agreement would work best for your personal injury case will depend on many factors, which should be thoroughly discussed with your solicitor, who will be able to advise you of your options. http://www.adviceguide.org.uk/england/law_e/law_legal_system_e/law_taking_legal_action_e/using_a_solicitor.htm

About 

David Cant is a Chartered Safety and Health Practitioner with a brain you can pick. Fluent in practical advice. He has a wealth of Industry experience and is the Director of life at Veritas Consulting.

You can find him on - Twitter and Facebook also Linkedin

This post has been filed in: Guest Blogger

2 Comments

  1. David M
    June 19, 2012 at 10:33 am

    Excellent post, very informative and I gained a lot more info about this topic, Thanks

  2. Anna Jackson
    July 25, 2013 at 4:57 am

    I personally like David’s writing, especially on law related matters. Personal injury compensation is very burning issue and David always like to write about fast issues.

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