A success fee is the amount of compensation your solicitor will deduct for winning your claim under a no win no fee agreement.
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What is a Success Fee in Personal Injury Claims?
Most personal injury claims are made under a no win no fee agreement between a claimant and their solicitor. This involves paying a success fee to your solicitor if they win your case, to compensate them for their work and the risk of not being paid if the claim is lost.
The success fee is capped by law at 25% of the part of your compensation covering general damages and past financial losses, and cannot be deducted from future financial losses. This type of arrangement can be used to fund any personal injury claim, including for work accidents, road traffic accidents and medical negligence.
Read our guide on ‘What is a success fee in personal injury claims?’ to learn more about when and how you need to pay this fee and what happens if your claim is unsuccessful.
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What is a No Win No Fee agreement in personal injury claims?
If you were injured due to someone else’s fault, you might consider making a personal injury compensation claim. Many people, however, worry about the financial risk of hiring a solicitor, especially when there’s no guarantee that their claim will be successful.
To address this concern, no win no fee agreements were introduced in the UK in 1995 by the Conditional Fee Agreements Order 1995 under the framework of the Courts and Legal Services Act 1990. This type of service gives everyone access to legal representation, regardless of their financial situation, without any upfront costs or financial risk.
The conditional fee agreement (CFA) works like this:
- Your personal injury solicitor takes on the risk of starting your claim.
- You don’t pay them anything upfront, or if your claim is lost.
- If your claim is successful, your solicitor will be entitled to a success fee, which covers their work.
Your solicitor may also advise you to take out After the Event (ATE) insurance for protection against legal fees and disbursements, such as the defendant’s solicitor costs. If the case is lost, the ATE is intended to cover these costs so that you should not ordinarily incur such losses.
How does a success fee work in No Win No Fee agreements?
The success fee is a percentage of the compensation awarded to you. It compensates your no win no fee solicitor for taking on the financial risk of handling your case without asking for any upfront fees.
Key aspects of the success fee include:
- It is capped by law at 25% of your general damages and past financial losses.
- The success fee percentage is agreed upon from the beginning and stated in the CFA.
- You only pay the success fee to your solicitor if the claim succeeds.
- If your claim is unsuccessful, you don’t pay anything to your solicitor.
Why do personal injury solicitors charge a success fee?
Personal injury solicitors charge a success fee to cover the financial risk they take when handling a claim under a No Win No Fee agreement. This means you don’t pay any upfront legal costs, and your solicitor only gets paid if your claim is successful.
The key reasons for charging a success fee include:
- It mitigates the risk of not being paid if the claim fails.
- It compensates for the delay in payment, as some cases can take years to resolve.
- It covers the time and the work the solicitor spent on your case.
By charging a success fee, solicitors can continue to offer their legal services to claimants who might otherwise be unable to afford legal representation.
How much is a success fee in personal injury claims?
The success fee in personal injury claims is capped by law at 25% of the compensation awarded for general damages and past financial losses. For example, if your compensation award is £10,000, your solicitor can get a maximum of £2,500 as their success fee.
While different law firms and solicitors may have different success fees, most stick to the 25% cap. This compensates them for the significant financial risk they take on, as they cannot reclaim their costs if the case is lost.
Furthermore, this reflects the complexity of claims and the work your solicitor will do on your behalf, including:
- Assess your case and the full extent of your injuries.
- Gather and review supporting evidence.
- Obtain expert advice and testimony.
- Calculate your full compensation.
- Negotiate with insurers.
- Prepare your case for court, if necessary.
- Offer you support and advice throughout the claims process.
Is the success fee deducted from my compensation?
Before the introduction of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) in 2013, solicitors could recover their success fee from the defendant. This meant claimants kept 100% of their compensation for a personal injury.
However, since April 2013, success fees are no longer covered by the defendant and are instead deducted from the claimant’s compensation.
If you win your claim, your solicitor will deduct a pre-agreed percentage of your compensation as their success fee. However, this is capped at a maximum of 25% of your general damages and past financial losses.
The success fee cannot be taken from any future financial losses included in your special damages, such as the cost of ongoing medical treatment, rehabilitation or long-term care needs.
Are there any other deductions besides the success fee in personal injury claims?
In no win no fee claims, the success fee is the main deduction from your personal injury compensation.
Other potential deductions may include:
- The ATE insurance policy. This is only payable if you win your case. You won’t be charged upfront or if you lose. The cost depends on the type and complexity of your claim.
- Interim payment. If you received interim payments while waiting for your case to settle, these will also be deducted from your compensation.
- Disbursements. In rare cases, you may also have to cover small costs that can’t be reclaimed from the defendant, such as medical report costs.
What will happen if my claim is unsuccessful?
If your no win no fee claim is unsuccessful, you won’t need to pay a success fee to your solicitor. The conditional fee agreement protects you from financial risk, and you won’t be charged for their services.
However, you may need to pay the defendant’s legal costs and disbursements. That is why your solicitor may have taken out an After the Event (ATE) insurance policy on your behalf.
If your claim is unsuccessful, the ATE premium is generally not payable, which is intended to give you peace of mind.
What types of claims can be made under No Win No Fee?
A wide range of personal injury cases can be handled under a no win no fee agreement, including:
- Road traffic accident claims
- Accident at work claims
- Public liability claims
- Medical negligence claims
- Serious injury claims
- Holiday accident claims
- Military accident claims
- School accident claims
What are the benefits of No Win No Fee agreements?
A no win no fee agreement offers several key advantages that make personal injury claims more accessible and risk-free for claimants:
- You don’t have to pay anything to start your claim.
- It makes access to justice possible for everyone, regardless of their financial situation.
- The solicitor’s payment depends on the success of the case, so they are motivated to win.
- The success fee is proportionate to your compensation, so the solicitor is also motivated to achieve the maximum settlement.
- The conditional fee agreement is transparent, and all the fees are agreed upon from the beginning.
- It can be used to make any type of personal injury claim.
- You can focus on recovery without worrying about expensive legal costs.
- If you lose the claim, there is nothing to pay to your solicitor.
Can I make a personal injury claim on a No Win No Fee basis?
The easiest way to find out if you can claim compensation is through a free consultation with a personal injury lawyer. Generally, they will help you make a no win no fee claim if your case meets the following criteria:
- Another party owed you a legal duty of care.
- They breached it through negligence or wrongdoing.
- You suffered an injury or illness as a direct result.
- You are within the legal time limit to start a claim (generally 3 years, though different limits can apply for children and people who lack mental capacity).
For a free case assessment and more information about what a success fee is in personal injury claims, get in touch by calling 0800 470 0472 or using our contact form.
