When you make a new application for a personal injury claim, your claim will be processed on a ‘no win, no fee’ basis, which basically means that should your claim lose, then you will not have to pay any of your own lawyer’s fees. Under such an agreement, you should also have no legal fees to pay upfront or during the claims process. So, you should get access to the best quality legal representation, without having to pay for it out of your own pocket.
With that in mind, you might be wondering how your lawyer gets paid, since no money will leave your bank account. There are two answers to that question:
- Your lawyer keeps a percentage of your compensation: Personal injury lawyers are legally allowed to take a maximum of 25 per cent of your compensation, as payment for their services. The percentage a lawyer will take must be clearly disclosed to the claimant, and it should form part of the ‘no win, no fee’ agreement.
- Your lawyer will recover their costs from the other side: It is sometimes possible for a personal injury lawyer to recover their costs from the other side. In which case, the claimant gets to keep 100 per cent of their compensation. A lawyer might also be able to reduce the percentage of compensation they take as payment, by recovering some of their costs from the other side, after the claim has been processed.
Option 2 is the preferred payment method, since it satisfies both parties, however if recovering costs from the other side is not possible, then option 1 is the only alternative; it is also important to point out that option 2 is common where cases go to court.
So, will I get to keep 100% of my compensation?
The answer to that question depends on how your lawyer will recover their costs – which is why you should clarify this with your lawyer before you claim. If they can recover their costs from the other side, then yes, you will get to keep 100 per cent of your compensation. But, if they cannot, then they will take a percentage of your compensation as payment.
In truth, taking a percentage of the claimant’s compensation is common practice in the personal injury industry. All it means is that you will get to keep a minimum 75 per cent of your compensation. Many lawyers also take less than 25 per cent, although this will depend on the amount of time and effort your lawyer puts into your claim. For example, if a lawyer has to work overtime to build your case then it is likely they will take the maximum amount.