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It should not be necessary for you to make any payments to your solicitor for legal costs until the conclusion of a successful claim.
With the removal of Legal Aid it was recognised that a member of the public with moderate means could not take the risk of meeting these fees and so today personal injury claims should be funded either through a Conditional Fee Agreement (CFA) in conjunction with after-the-event insurance, or through before-the-event Legal Expense Insurance (LEI).
Conditional Fee Agreements (CFA OR No Win No Fee) with after-the-event insurance
You cannot enter a CFA if you have LEI in place at the time the accident occurs. If you do and it turns out later that you did have LEI, it will invalidate your CFA. Your solicitor will help you check whether you have LEI.
Any solicitor who regularly does Personal Injury work should be prepared to offer a CFA if they feel you have a good case.
Under a CFA your solicitor runs the case on the basis that if it turns out to be unsuccessful no legal fees will be charged. In certain circumstances, the defendant’s lawyers will need to be paid and therefore your solicitor must arrange insurance against this and other payable costs (medical experts’ fees, court fees etc) from the start. The premium for this cover can be deferred and at the end of the claim this will be payable from your compensation if you win.
You should not have to pay anything if your claim is unsuccessful and the insurance premium will be waived.
Before-the-event legal expense insurance
The majority of drivers have LEI attached to their motor policies even if they are unaware of it. Some insurers automatically provide this cover under the main premium.
LEI is also often attached to home contents insurance policies and this normally covers claims relating to other types of accident - sometimes even medical negligence - the policy document will specify the types of claim it covers and if in doubt, your solicitor will explain the extent of cover.
LEI is sometimes also attached to credit cards and whilst less common, is worth checking.
Legal Aid
The changes brought about by The Legal Aid, Sentencing and Punishment of Offenders Act 2012 mean that legal aid is no longer available in the vast majority of claims. An exception applies to certain clinical negligence claims on behalf of severely disabled claimants who suffered brain injury either before, during or soon after birth.
It is common knowledge that taking action in the courts against an opponent who disputes your claim can be stressful and expensive. Recently, alternatives to bringing court action, such as alternative dispute resolution and mediation, have become more common. Another option is to take action on a 'no win no fee' (NWNF) basis.
No Win No Fee (NWNF)
How Does It Work?
One of the principles of English law is that the loser in a court case pays the costs of the winner in addition to their own. In NWNF, the solicitor agrees not to charge a fee unless the action is successful. This means that if you instruct a firm of solicitors on a NWNF basis, your risk as to costs is limited to the other side's costs plus any 'disbursements' (such as the cost of expert witness reports) incurred by your solicitors and the court costs. You can, however, buy insurance to cover these costs and it is generally recommended that you do so.
Running a legal action on a NWNF basis with costs insurance means the solicitor is taking the largest financial risk. Since a court case will only take place if both parties to the dispute think they have a good chance of winning, the solicitor will normally charge a 'success fee', which is an extra fee designed to compensate them for the risk that you may lose and they do not get paid. The success fee varies depending on how risky the case is thought to be. Provided the success fee is reasonable, the court will normally make the loser pay it as part of the winner’s costs.
The two forms of legal insurance you can buy to cover court costs are called 'after the event' (ATE) and 'before the event' (BTE). ATE insurance is bought when you are in dispute and need to cover your costs and the other side's legal bill should you lose. BTE insurance is commonly sold with house or motor insurance policies to cover your costs in the event of your being sued.