Twenty years ago, personal injury claims were available in England and Wales through legal aid. This meant that you if you were badly hurt, you could sue the person responsible for free. In 2000, this all changed. Now, it is left up to Personal Injury Solicitors, and they require payment.
You must have seen the Ads – actors falling over in black and white, troubled frowns on their faces. ‘Been involved in an accident that wasn’t your fault?’, ‘Have you been injured at work?’, a lawyer asks, swooping in to save the day. Other than the normal awkwardness, almost all these adverts have something in common, they all claim to take your case on a ‘No Win, No Fee’ basis. What does this mean? and how can it be true?
In short, it is technically true. If you lose, you will not have to pay your lawyer any fees. This sounds fantastic. But, in reality, it means that solicitors are less likely to take ‘risky’ cases, no matter how much a person’s life has been ruined by an accident, and it means that the fees that are paid to them, are increased, in some cases doubled, to account for any hours worked in another case that they have not been paid for.
This means, if hiring a personal injury lawyer before the year 2000 cost £3000, now hiring one and winning would cost more like £6000.
As well as this, losing is not always truly free. You would not have to pay your lawyer, but you could have to pay the defendant’s fees. Depending on who you are suing, this could be a lot of money. As a solution to this, lawyers advise you take out ‘after the event’ (ATE) insurance. This is insurance that will pay the defendant’s fees, and any other legal costs that are incurred, should you lose. However, as with all insurance, there are premiums involved, and in the case of ATE insurance, these are high.
This means that it is likely that a large amount of your winnings would go straight back into paying off those premiums, as well as into paying your lawyer’s doubly expensive fees.
This problem, however, was discussed and sorted in 2001, with a Court Case ‘Callery v Grey’. The initial case was simple. Grey had hit Callery with his car and injured him. The court ruled that Callery deserved compensation. However, it also ruled that Grey should pay for Callery’s premiums and an inflated 40% success fee to cover legal costs. Grey and his legal team disputed this. They argued that Callery didn’t need to take out ATE insurance because it was a clear-cut case, so they shouldn’t have to pay it.
It was taken to the Court of Appeals, but the sentence was held. This set the precedent that someone winning a personal injury claim, is able to recover legal and insurance costs from the other side.
So what should we take from this?
First of all, try your best not to cause an accident! Other than the obvious damage you are doing to another person, losing a personal injury case is now incredibly expensive. Paying someone compensation, inflated legal fees and insurance fees could be more than you can afford.
Second of all, if you have been in a serious accident, No Win, No Fee Solicitors really could help you. Being unable to work for a long period of time, and having extra costs associated with medical care can turn your finances into a nightmare. Research into the costs of ATE insurance specific to your case – as you will have to pay those premiums if you lose – and the impact a payout may have on your other insurance premiums, and then look into hiring a ‘No Win, No Fee’ Solicitor. Unfortunately, there is still risk involved in taking your situation to court, but thanks to Callery v Grey, there is less financial risk than you might think.