So here’s the situation, you’ve had an accident and realise that you are injured. You are upset and angry and financially out of pocket.
You contact a Solicitor to claim compensation and to be reimbursed for this traumatic event only to be told that they will take 25% out of your compensation. No explanation as to why, no chance that this might be less. Just we will take 25% as our cut if we win. Has this happened to you?
The funding of claims by means of a Conditional Fee Agreement (CFA) is possibly the most confusing part of a personal injury claim for any Claimant. There’s so much legal jargon that most don’t read it and if they do, they don’t understand it. In reality it seems that some Solicitors have also failed to understand what these contracts (CFAs) say.
Unfortunately, a common practice seems to have developed within some Solicitor’s firms that they will take a flat 25% of the compensation if the claim succeeds, but that is not what the rules say!
Here at Metcalfes, we explain everything and ensure that you don’t sign a CFA without knowing the score.
In 2013 the law in respect of recovery of Solicitors costs from their opponents changed. Historically a Solicitor would be able to claim the costs of a successful case as well as a success fee from the Defendant and the injured person paid nothing. It was all very clear and simple.
In true legal fashion, everything became very complicated in April 2013 when, along with many other changes to the personal injury claims regime, recovery of the success fee from defendants ceased. A Solicitor can no longer recover their success fee (nor indeed the full amount of the costs that they incur) from their opponents.
Instead the government provided for Solicitors to take money from the Claimant’s compensation to make up the shortfall in their costs and success fee.
Solicitors do not have an automatic right to a flat 25% of all of the compensation. The new laws implemented under the Legal Aid, Sentencing and Punishment of Offenders Act 2012 which replaced the previous rules do not allow this.
The law in fact states that a solicitor can only recover a success fee up to a maximum of 25% of the compensation awarded for pain, suffering and loss of amenity and past losses; any other deduction from your compensation must represent the shortfall between the base costs recovered from the defendant and those billed. It is important to check the terms of your original agreement to see the extent to which these costs can be deducted from your compensation, if at all.
Solicitors should make a calculation of their fees plus the percentage success fee, deduct the costs that they recover from the defendant and then only the shortfall should be deducted from the compensation.
So you need check that your solicitor is calculating the correct amount that they take from your compensation which may be a lot less than 25%.
Admittedly for many people, the contribution will amount to 25%, but this is not always the case. In a relatively straightforward personal injury claim the solicitor should not be billing heavily if not much work was done so check the figures to prevent being over charged. A firm should honestly set out their charges and show their calculations, otherwise, what are they hiding?
Metcalfes will only ever claim what they are entitled to and will only seek to recover the costs that they are due for the work they have actually done without embellishing their costs schedule. Furthermore, the new rules mean that the money paid for the pain, suffering and loss of amenity caused by the injury should be increased by 10% to make up for the contribution to costs to be paid. We, at Metcalfes always ensure this 10% is added.