Interest on claim amount successfully awarded after a RTA

splinternet

Hello - my claim against a third party who went into the side of my car two-and-a-half years ago finished up in court a few weeks ago and the judge decided that the TP was 100% to blame.  Great result for my persistence - I lost count of the number of times I was urged by (1) my insurance company, (2) the accident management company who handled the claim for them, (3) the solicitors retained by the accident management company, and even on the day of the court hearing (4) the barrister appointed by the solicitors, that it would most likely be a 50:50 judgement and (as asked by the barrister just 15 minutes before the hearing) would I not prefer to accept 50:50 now?  Anyhow, when the judge had given his verdict, there then followed a three-way discussion between him and the two barristers about the rate of interest to be applied to the claim amount.  Whatever figure was agreed, it was done very quickly.  Personally I was only £300 out of pocket (from October 2022) but nonetheless I thought I would receive a slight uplift with interest, perhaps i.t.r.o. £330. A couple of days ago, I received a cheque for £300 from the solicitors.  Out of curiosity, I wrote back asking whether I should have had interest applied, to which they replied "The interest made from the claim is given to <insurance company> and <name of solicitors>" and they pointed to a paragraph hidden deep within a document they had sent me 18 months ago saying:

"If you have already informed us of your uninsured losses and they are being included within this claim, <name of solicitors> are entitled to recover interest on those losses. Should a recovery be made and interest be obtained we confirm that we will limit our costs for work to which we have incurred on your behalf for recovery of those losses to the amount of the interest we recover from the responsible party."

So is the Solicitors' only remuneration the amount of interest on the sum recovered?   Said differently, no win no fee (or whatever the phrase is)?   No wonder they didn't want me to persevere with this.  The cost of the repair was £8,200 (including my excess) so they only stood to pocket two years' interest?  So, for example, just over £800 if the interest rate was 5%?  And the insurance company would only receive the £7,900 they had shelled out to the repairer?  (I'm not even considering how the Accident Management Company got paid).

I'm just a bit non-plussed at all this.  Is this standard practice (expecting the answer 'yes').

DullGreyGuy

How the solicitors are remunerated depends on the contracts, funding method and the track of the court system the case goes into (which is broadly dependent on the value of the claim).

Court cases are a roll of the dice, there is never certainty which is why insurers generally prefer a negotiated settlement than the risk of court. Coincidently a friend recently went to court over his motor accident, his insurers, barristers etc were certain he'd win. His version of events was he was parked at the side of the road, sat in the passenger side, engine off. The TP's version was he pulled out from parked into the path of her correctly proceeding vehicle. He has over 300 texts from the woman saying she would curse him and his family for generations if he didnt admit what he'd done (she's a psych nurse). The judge rules 80/20 against him.

In small track the solicitor gets nothing from the third party (cases under £10,000 with no injury). They typically get nothing from you directly because its not conditional funding (aka no win, no fee) so cannot keep a percentage of your winnings (for injury its capped at 25%, for non-injury its technically uncapped).

What the insurer does or doesn't pay them comes down to their own arrangement. Before the whiplash reforms we paid them nothing, they have to do these low fee cases for free and in exchange we give them a long supply of injury cases for which they can get paid well. I've not worked on LE insurance since the whiplash reforms. 

Statutory interest is 8% simple interest, ie you dont get interest on your interest.