Most people are aware nowadays that it costs to claim. This is thanks to overzealous government reforms from April 2013 that have stopped innocent accident victims from being able to recover all of their legal fees from the opponent.
As if that wasn’t bad enough, the level of fees that can be recovered was slashed and is set at a barely workable fixed rate as well. Lawyers normally recover their reasonable hourly rates but now victims are facing lower service levels and less access to justice.
So in this crazy world of claiming costs, where do you REALLY stand and what isn’t your law firm telling you?
I’m writing this because we have found that a lot of people are being charged way more than they thought they would be by other firms. I’ll say right away that we are always honest and upfront about how our fees work and our clients are put clearly in the picture when it comes to our costs through both discussion and paperwork.
But unfortunately people are reading and agreeing to paperwork they simply don’t understand or have not comprehensively read through. On top of that, many law firms are adopting a rather loose approach when it comes to explaining how fees work over the phone. Don’t get me wrong, if it’s in the paperwork and you have agreed to it, it is your responsibility to only agree to a contract where you have fully read and understood all the terms and conditions.
So the difference isn’t about whether lawyers are acting ethically or not, it’s more about whether they are doing EVERYTHING they can to put you in the picture; which is what we try to do.
So, to help you out a little, here are some warnings of what to look out for and what to question when speaking to a law firm. If a law firm doesn’t explain this to you then they may not be putting you fully in the picture.
Additional Percentages
Most law firms take 25% for the Success Fee which is no longer recoverable. This is the maximum amount that can be taken from your claim, but this doesn’t stop a law firm then having additional percentages for other fees.
Remember: fees were reduced as well as being no longer being recoverable, so the hit a law firm takes now – is considerable!
You could have a situation where it is 25% for the Success Fee and then 10% for additional fees – meaning you have an overall deduction of 35%. As long as the Success Fee is limited to 25%, they can get round this by applying additional percentages for other fees.
If you get a lawyer through a claims management company it’s likely they’ll have charges as well
Upfront fees or additional costs
As well as the Success Fee no longer being recoverable we also cannot recover the cost of an After The Event insurance premium either. Many law firms will want this upfront or as a deduction at the end of the case and it can typically cost around £1,500.
You may have to pay additional administration fees to referral companies or general fixed amounts for a solicitor as well to reflect the fact that it is now harder than ever to be able to offer quality service to clients as a result of the significant cuts. Essentially the victims are losing out and the multi-million pound insurance industry is massively gaining.
What you may NOT know
Here are some things that law firms are not always fully straight with you when it comes to comprehensively discussing legal fees with potential clients:
- Do any fees you need to pay include or exclude VAT? The difference could be significant
- Will you have to pay the shortfall if your lawyer being unable to recover their hourly rate and correspondence charges?
- Although the Success Fee deduction is capped at 25% a solicitor is not compelled to take the full amount. It isn’t against the law or impossible to offer a lower amount
- The phrase that ‘everyone charges the same‘ is not true at all. We normally beat other law firms offers by considerable degrees
So if you want no upfront fees, no hidden charges, and a comprehensive understanding of exactly what you may or may not need to pay, call our free claims helpline on 0800 634 7575 to see if you qualify for a better deal!
We do things differently – and we’re proud of it!