What are the Real Financial Risks of Making a Personal Injury Claim?

Accident claims can be a risky business, but if you’ve lost out on income as a direct result of an accident that wasn’t your fault, with a strong case you should be able to claim the compensation you deserve.

Personal Injury Claim


In days gone by, the government offered legal aid for personal injury claims to help claimants who could not afford the hefty hourly rates associated with legal representation.

This scheme was scrapped and gave rise to the no win, no fee agreement as a suitable alternative for people unable to afford legal fees.

The flipside to the no win, no fee agreement is that solicitors would need the claimant to agree to pay an uplifted fee should the case be successful, as compensation for the increased risk they were taking.

Since the claimant’s reasonable expenses were to be paid by the defendant in the event of a successful claim, lawyers could hike up their costs as much as they liked and the defendant would have to bear the financial burden.

In an effort to prevent lawyers taking advantage of this system, recent legislation has been implemented which means that now the claimant’s legal fees are to be paid out of their damages, not by the defendant as was originally the case. This works either by a conditional fee agreement (where the solicitor is paid an agreed uplifted fee if the case is successful), or a damage-based agreement (whereby the solicitor is paid an agreed percentage of the damages received).

So what are the real financial risks involved with a personal injury claim?

  • Legal fees. Unless you have entered a conditional fee agreement, you will be responsible for paying your own legal fees. These can be recovered from the defendant upon a successful claim. If your claim is unsuccessful, however, you will have to pay not only your own legal fees but will be liable for the defendant’s reasonable expenses, too.
  • Disbursements. These involve any payments made to third parties to help strengthen your case. They include court fees and expert witness fees. Disbursements should be recoverable from the defendant in the event of a successful claim, and likewise you will be liable to pay the defendant’s disbursements should the case be unsuccessful.
  • Insurance. If you enter a no win, no fee agreement you may be required to take out insurance to cover you against the cost of the defendant’s fees in the event that your case fails. The cost of this premium will vary depending upon the insurance company’s assessment of your case and is non-recoverable.

So the reality is if you have a strong case, there is little financial risk involved in a personal injury claim.

You will have to make a lot of payments in the run up to the case but hopefully most of what you spend will be recoverable upon success. Just make sure to come to a reasonable agreement with your solicitor so you can still take away a good percentage of the damages received.

If you’re looking for a professional solicitor to help you with a personal injury claim, be sure to contact First Personal Injury.

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