Funding a Personal Injury claim

There are several ways to pay for legal representation when making a personal injury claim. The right option will depend on your circumstances, the funding available to you and the terms offered by your solicitor.

You may be able to fund your claim through legal expenses insurance, trade union membership or an agreement that allows you to pursue compensation without paying legal fees upfront. Alternatively, you may choose to pay your solicitor privately.

Each option has different benefits, costs and limitations. Understanding these differences is important, particularly if you’re concerned about the financial risks of making a claim.

Legal aid is generally not available for personal injury claims. This means most people will need to consider alternative ways to fund their legal representation.

However, not being eligible for legal aid does not necessarily mean you need to pay legal fees yourself. Other funding arrangements may be available, depending on your circumstances.

Private funding means paying your solicitor’s legal fees yourself as your claim progresses.

This gives you the freedom to choose which solicitor represents you, without being restricted to a legal representative selected by an insurer or trade union.

One advantage is that you would not need to pay an additional success fee to your solicitor if your claim succeeds.

You can also choose the solicitor you want to represent you.

Paying privately can be expensive, particularly if your claim takes time to resolve.

You will generally need to pay your legal fees as the case progresses. If your claim is unsuccessful, you will still be responsible for your own legal costs.

Depending on the outcome and the funding arrangements available, private funding could cost more than an alternative method.

If you’re a trade union member, you may be able to access financial assistance towards the cost of making a personal injury claim.

Trade union funding is generally available only to members, and the support provided will depend on the union and its arrangements.

Your trade union may help cover legal costs, including upfront expenses and fees for experts involved in your case.

Some trade unions can also provide support throughout the claims process.

Trade union funding may not be available for every type of personal injury claim. Some unions place restrictions on the cases they will support.

You may also have less freedom to choose your solicitor. Your trade union may appoint a legal representative from its own panel rather than allowing you to select someone independently.

Legal expenses insurance, often shortened to LEI, is insurance that helps cover the cost of legal matters.

You may already have this cover as part of an existing insurance policy, such as car insurance or household contents insurance.

If you have legal expenses insurance, it may help pay the legal fees and other expenses associated with your personal injury claim.

Insurance policies often set a maximum amount they will pay towards legal costs.

It’s important to understand this limit and whether the available cover will be enough to meet the costs of your claim.

Your insurer may also require you to use a solicitor from its selected panel, which could restrict your choice of legal representative.

A conditional fee agreement (CFA), commonly known as a no win, no fee agreement, is another way to fund a personal injury claim.

Under this arrangement, you may not need to pay towards your legal costs until your claim has settled.

If your claim is unsuccessful, you will not be responsible for your own legal costs or expenses covered by the agreement.

Conditional fee agreements are usually arranged alongside after-the-event (ATE) legal expenses insurance.

The terms of a CFA can vary between law firms, so it’s important to understand exactly what your agreement covers before signing it.

Some conditional fee agreements include a success fee.

This means your solicitor agrees not to charge certain fees if your claim is unsuccessful. In return, they may charge an additional fee if you win your case.

This success fee may be deducted from your compensation. It is capped at 25% of the compensation recovered for your injury and past financial losses.

Not every conditional fee agreement includes the same charges. The amount you may need to pay will depend on the terms agreed with your solicitor.

The main advantage is that you should not need to pay legal fees upfront.

A CFA can also reduce your financial risk if your claim is unsuccessful, because you will not have to pay your own legal costs and expenses covered by the agreement.

This can make pursuing compensation more accessible if you would otherwise struggle to pay for legal representation.

You may have to pay a success fee or other additional legal costs if your claim succeeds, depending on the agreement.

Not every law firm offers conditional fee agreements. Solicitors may also have their own criteria for deciding which cases they are prepared to accept under this type of funding arrangement.

This means a CFA may not be available for every personal injury claim.

Before agreeing to a CFA, make sure you understand:

• Whether you will need to pay a success fee if your claim succeeds
• Whether any additional legal fees or expenses could apply
• What costs are covered if your claim is unsuccessful
• Whether after-the-event insurance is included
• How the agreement could affect the compensation you receive

Understanding these terms will help you make an informed decision about whether the arrangement is right for you.

A damages-based agreement (DBA) is another funding arrangement where your solicitor’s fee depends on the success of your claim.

Rather than charging a fixed fee or an hourly rate, your legal representative agrees to receive a percentage of the compensation awarded if your claim succeeds.

The agreed fee is therefore linked directly to the outcome of your case.

For personal injury claims, damages-based agreements are subject to a statutory cap of 25%.

This limits the percentage that can be charged under the agreement.

DBAs are generally less popular than conditional fee agreements, partly because the total fees can be less certain.

Before entering into a DBA, it’s important to understand the percentage your solicitor will charge and how this will affect the compensation you receive.

Choosing how to fund your claim is an important decision. The arrangement you select can affect both the financial cost of pursuing compensation and the legal representation available to you.

There is no single funding method that will be right for everyone.

When considering your options, think about three key areas.

1. The potential costs

Consider whether you would need to pay legal fees upfront, whether additional charges could apply and what you might have to pay if your claim is unsuccessful.

2. Your choice of solicitor

Some funding arrangements allow you to choose your legal representative, while others may restrict you to a solicitor selected by an insurer or trade union.

3. The terms of your agreement

Make sure you understand what your funding arrangement covers, any limits that apply and whether fees could be deducted from your compensation.

Taking time to understand these details can help you avoid unexpected costs and choose an arrangement that suits your circumstances.

If you’re considering making a personal injury claim, it’s understandable to have questions about how much it could cost and what financial risks may be involved.

Understanding your funding options is an important first step. The right arrangement can help you pursue compensation while managing the financial pressures that may follow an injury.

At Fletchers Solicitors, we understand that dealing with an injury can be difficult, particularly when you’re also facing medical expenses, lost earnings or rehabilitation costs.

Our personal injury solicitors can discuss your circumstances and help you understand your options for making a claim.