Success fee for compensation claim

catford

My son and I were recently involved in a no fault RTA with an oncoming jack-knifed lorry and trailer. Fortunately we both survived with only shock and whiplash injuries.:eek:
My insurance company has recommended a company to process a personal injury claim on our behalf.
They are a no win no fee company but want 10% of the compensation award as a success fee.
Is this a reasonable percentage?
They told me that the rules changed recently and that all awards were now automatically increased by the 10% so claimants didn't lose out.
Is this fact or sales fiction?:D
Mods...If this post is in the wrong place please move it for a better response.
Thanks from a second chance family;);)

dacouch

DO you have Legal Protection Cover on the Motor Insurance?

[Deleted User]

Do you need a company to handle the personal injury claim? If you work out how much it has cost you for treatment, time off work etc. you can just contact the TP's insurance with an invoice for it and see what they do.

catford

dacouch wrote: »

DO you have Legal Protection Cover on the Motor Insurance?

No, I had no legal protection cover but the accident has been accepted as no fault on my side.
I'm just fishing for advice.;)

catford

DELETED USER wrote:

Do you need a company to handle the personal injury claim? If you work out how much it has cost you for treatment, time off work etc. you can just contact the TP's insurance with an invoice for it and see what they do.

My insurance company has suggested a company to handle my claim. The company called me and said that they are no win no fee but will take 10% of any compensation award.
My question is.....is this the usual amount?

kharensunner

Not exactly as it is!

OnanTheBarbarian

catford wrote: »

My insurance company has suggested a company to handle my claim. The company called me and said that they are no win no fee but will take 10% of any compensation award.
My question is.....is this the usual amount?

10% success fee is quite low to be honest.

The rules changed from 1st April 2013 when success fees could no longer be recovered from the other party.

They are capped at a maximum of 25% + VAT and although it was thought that there would be a race to the bottom with firms competing with each other, resulting in nobody taking success fees, the vast majority are taking 25%.

The reason for this is that the cost of actually obtaining a client, be it through paying kickbacks to insurers/brokers/accident management companies, or advertising directly means that the typical cost of getting a client is several hundred pounds. The costs lawyers get were slashed by over 60% in April 2013, so most firms are living off whatever success fee income they get.

There are firms out there who will not deduct a success fee and there are also free alternatives to motor legal protection cover of you search.

catford

OnanTheBarbarian wrote: »

10% success fee is quite low to be honest.

The rules changed from 1st April 2013 when success fees could no longer be recovered from the other party.

They are capped at a maximum of 25% + VAT and although it was thought that there would be a race to the bottom with firms competing with each other, resulting in nobody taking success fees, the vast majority are taking 25%.

The reason for this is that the cost of actually obtaining a client, be it through paying kickbacks to insurers/brokers/accident management companies, or advertising directly means that the typical cost of getting a client is several hundred pounds. The costs lawyers get were slashed by over 60% in April 2013, so most firms are living off whatever success fee income they get.

There are firms out there who will not deduct a success fee and there are also free alternatives to motor legal protection cover of you search.

Sorry,I didn't understand your last paragraph, can you explain pls?

Crazy_Jamie

catford wrote: »

Sorry,I didn't understand your last paragraph, can you explain pls?

Onan was just putting forward some of the rhetoric behind the recent rule changes and their effects.

The bottom line is this. Yes, the company was telling the truth when they say that general damages are now automatically increased by 10%. Companies can actually take up to 25% of your damages, and indeed most do. However, there are still plenty of firms who do not deduct anything from your damages.

So to answer your question, 10% is a reasonable deduction in one sense because most firms now take 25%. But there are still plenty out there, usually smaller local firms, who do not make any deduction at all. Your case appears to be exceptionally straightforward and can likely easily be dealt with by any solicitor with experience of personal injury law. You can go with the firm that wants to take 10% for the sake of convenience, but chances are if you hunt around a bit you can find one that will not make any deduction.

DELETED USER wrote:

Do you need a company to handle the personal injury claim? If you work out how much it has cost you for treatment, time off work etc. you can just contact the TP's insurance with an invoice for it and see what they do.

Which, as ever, leaves the issue of the OP trying to place a value on their injuries, which the average person simply does not have the knowledge or experience to do so. Providing the OP can find a solicitor who is willing to act with no success fee there is no reason why they would act in person instead.

InsideInsurance

OnanTheBarbarian wrote: »

They are capped at a maximum of 25% + VAT and although it was thought that there would be a race to the bottom with firms competing with each other, resulting in nobody taking success fees, the vast majority are taking 25%.

I believe its capped at 25% gross, so if the sols are VAT registered then it'd be 25% inc VAT not 25% + VAT

Pajoma

InsideInsurance wrote: »

I believe its capped at 25% gross, so if the sols are VAT registered then it'd be 25% inc VAT not 25% + VAT

That's correct but they can also deduct an ATE insurance premium on top of the success fee.

I've seen ATE premiums deducted on RTA claims at prices of £300, where I know the actual underwriting price from the insurer is around £60 plus IPT. Effectively the £240 difference either goes to claims management companies or a side business owned by the solicitor. Just another way to screw a bit more out of your compo