It’s usual nowadays for a deduction to take place but you shouldn’t accept an agreement where a huge amount is being taken. Law firms are working in very different ways when compared to one another so it’s important to know what you can be charged and what you should be charged in light of recent legal fee reforms.
This blog aims to guide you so you know how much is too much!
Why am I being charged?
Because your government decided that you as the victim should bear some of the cost of making a claim. It really is entirely out of our hands and we do not agree with the reforms at all. They restrict access to justice and they have reduced what should rightfully be yours. But law firms cannot operate on a 100% agreements for every claim because the fees we now receive are simply not enough to fight your case.
The government has gone way too far with the cuts that are largely down to them being close to the multi-billion pound insurance industry who want to stop you harming their profits; despite the fact insurance is there to be used!
What can I be charged?
Technically, anything! An agreement is between you and your solicitor so they can agree with you a charging system based on whatever you are both happy with. But I can explain the law changes to you so you know what cost burden has now been passed on to you directly:
Success Fee: this is no longer recoverable from the other side and is now recoverable from your damages up to a maximum of 25%. So whatever the success fee is, no more than 25% from your compensation can be taken to cover it.
After The Event Insurance: this type of insurance can cover you so you don’t have to pay certain costs if a claim loses, or if those costs cannot be recovered. You used to be able to claim back the premium for this if you won, but now you can’t. Premiums can range from a few hundred pounds to tens of thousands of pounds depending on the case.
Additional charges to cover fee cuts: not only did the government stop you recovering all your fees from the opponent, they also reduced (by drastic amounts) what you can claim in fees. Road accident fees have been fixed at low amounts for a while, and they were halved in 2013. Costs for most other types of claims have also now been fixed at a fraction of around a tenth in most cases of what they used to be. Some lawyers will therefore want to recover additional fees from you.
So how much is the average amount a lawyer will charge me?
It really does vary from law firm to law firm, but most will take the full 25%, charge you for insurance (upfront in many cases), and many will have additional fees; particularly if you go through a claims management company or referral service.
In the past those sorts of companies would receive referral fees but they were banned as part of the reforms (which we do actually agree is a good thing) meaning you may pay more by not going direct to a law firm.
What should I avoid?
Go to a law firm directly and avoid the middlemen who may end up charging you for simply passing you to a law firm who you haven’t chosen. It’s like paying someone to buy a house or buy a car for you when you have never seen the property or test driven the vehicle. Its madness!
What we say is:
- You should never have more than 25% (inc. VAT) charged for most types of injury claims
- You may not need to have insurance for many types of claims
- You should never have to cover additional costs other than the success fee and insurance in most types of claims
So how do I get the BEST deal? Well you can come to us and discuss our offers where we:
- Don’t have to take 25%
- Don’t have to charge you for insurance
- Don’t have to charge you any upfront fees or additional charges or extras or hidden things etc
Always come to a law firm directly, ask about the fee system, and find out how we can get you a better deal. Just call 0800 634 7575 today!