Success fee for compensation claim

OnanTheBarbarian

Pajoma wrote: »

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

The only time there is need for ATE cover now is if you are going to litigate and there is a Part 36 offer on the table. Chucking it in from the outset at £200+ a pop is just poor form on behalf of solicitors and accident management companies.

I'll give ATE one praise though, it actually provides a genuine indemnity for own and opponent's costs, unlike BTE cover, which is just a sham for the panel solicitor doing the work (who has to absorb any costs/losses themselves rather than the BTE insurer paying them)

You can thank the deduction of success fees and ATE premiums from your damages to the insurance industry, who have been very clever at assisting a very large !!!!!! storm and then successfully getting the ear of government to give them what they want, hence the reforms.

Lots of hype about how it will get rid of claims management companies etc and see a reduction in claims, while it has sent quite a lot of CMC's out of business, the number of claims have increased, caused by insurer owned solicitors involved at claims capture stage.

Pajoma

The problem is if everyone only took out ATE at the time of issue, the net premium rate would probably be upwards of £800 even for a straight forward RTA because there would be no spread of risk between risky and non risky cases for the insurer.

A solicitor not recommending ATE at the outset at a rate of about £65 (Allianz) is at serious risk of professional negligence if they then have to recommend a policy at £800 or drop the case because they can't get cover at all.

BTW in case you're wondering, I have owned my own ATE brokers since 2008.

And regarding LASPO, with insurers funding Labour to the tune of £5m up until the Tories took over then switching allegiance to the Torys, it was always going to go in the insurers favour.

Re success fees, it's these that are allowing CMCs to continue. Some CMCs still charging £600 per case despite referral fee ban. Solicitord can only get £500 fixed costs from losing party so in effect the success fee goes straight to CMC. Injured person who uses a CMC is effectively saying "would you like 25% of my compensation for dialling a solicitors telephone number for me?"

It's crazy and corrupt

OnanTheBarbarian

I get approached regularly by CMC's wanting £650 for PI's and a £280 ATE bolt on. They get told to move on. Oh and btw providers wanting side letters signed to say you will never claim against the policy.

Pajoma

It's cos they know they could get it from a certain liverpool based firm, won't name them, let's just call them Bilverseck Timer! Only Bilverseck Timer have kicked a load of CMCs off their suppliers list because they can't cope with the work they've got.
CMCs seem to think those rates are the norm whereas it was just one firms ill thought out attempt at buying the market

catford

Pajoma wrote: »

It's cos they know they could get it from a certain liverpool based firm, won't name them, let's just call them Bilverseck Timer! Only Bilverseck Timer have kicked a load of CMCs off their suppliers list because they can't cope with the work they've got.
CMCs seem to think those rates are the norm whereas it was just one firms ill thought out attempt at buying the market

Thanks everyone but i'm no wiser for all your input:cool:

rs65

catford wrote: »

They are a no win no fee company but want 10% of the compensation award as a success fee.
Is this a reasonable percentage?

Onan wrote:

10% success fee is quite low to be honest.

Crazy_Jamie wrote: »

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.

Does that help?

rumad77

catford wrote: »

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.;)

Hence the importance of Before the Event Legal Expenses Cover which guarantees 100% settlement without deductions!