Navigating the aftermath of a personal injury can be overwhelming, both physically and emotionally. One of the critical aspects to consider during this challenging time is how to fund your claim effectively. Personal injury claims can often involve significant medical expenses, lost wages, and ongoing rehabilitation costs, which can add financial strain to an already difficult situation. Instructing a specialist personal injury solicitor will guide you through these issues.
There are alternative ways to fund a personal injury claim rather than paying up front (in advance) for legal fees, which enable clients to raise a claim that they would otherwise be financially restricted to make.
There are usually 5 different methods to be considered for the funding of a personal injury claim of which the best for you should be chosen:-
Legal Aid
Legal Aid is generally not available for personal injury cases.
Private funding
Of course, cases can be privately funded by the client themselves typically paid as the case progresses.
| Pros | Cons |
| There would be no additional fees based on success that need to be paid to the legal representative. | The amount paid for the Solicitor might be more than under an alternative form of funding. |
| The freedom to choose the solicitor who will be representing them in their claim. | If the case is lost, the client will still have to pay their own legal costs which is not the case under other forms of funding. |
Trade Union funding
Generally only members of a trade union will be able to access the benefits of this funding route.
| Pros | Cons |
| Trade unions would provide financial assistance to the case, including upfront costs and expert fees. | Trade union funding may have a limited scope, as some trade unions may have restrictions on the types of claims they support. |
| Trade unions may be able to offer support throughout the claim. | There may also be less control over who is instructed as the legal representative, as the trade union will likely instruct the solicitor from a panel. |
Legal Expenses Insurance funding (LEI)
LEI is a type of insurance that covers the costs associated with legal matters. It will typically cover legal fees and expenses. It may be found within car insurance or household contents insurance.
| Pros | Cons |
| LEI policies may cover a wide range of costs associated to the claim. | LEI policies will often have caps on the amount they will cover and so you would need to be sure there is enough within the cap to cover the anticipated legal fees. They may also require the client to use their selected solicitor rather than one of their choosing. |
Conditional Fee Agreement funding
This usually done with After The Event legal insurance. CFAs can also be known informally as a “no win, no fee agreement,” whereby the client may not have to make payments towards their litigation costs until their case has been settled. If the client loses their case, they will not be liable to pay for their own litigation costs or expenses that are covered by the CFA.
There may be different versions of CFAs depending on the legal firm. For example, some may include a ‘success fee’ whereby the firm would agree to forego its fees on a loss of a case but may seek a percentage increase of their fees deducted from the compensation should the case be successful (this is capped at 25% of injury compensation and past losses recovered).
The type of CFA available will depend on the law firm/legal representative, it is extremely important when discussing the terms of the CFA that the client is clear on what type of CFA they are agreeing to.
| Pros | Cons |
| There should be no upfront costs with a CFA | There is the potential of a ‘success fee’ and having to pay additional funds for legal fees. |
| There is a reduction of financial risk for the client if their case is unsuccessful. | Not all law firms offer CFAs as a way of funding a personal injury claim and so it may limit the options for clients to instruct a solicitor. Also, the solicitor may only be prepared to offer a CFA where it meets their own risk profile which may not be the same as the client’s risk profile. |
In most instances should you instruct Moore Barlow LLP under a CFA then we will not charge you either a success fee or shortfall therefore subject to adherence with our terms you will retain 100% of your compensation less the cost of an After The Event legal insurance premium.
Damages Based Agreements
A Damages Based Agreements (DBA) is an agreement between a representative and a client, whereby the representative’s agreed fee is contingent on the success of the case and is determined as a percentage of the compensation received by the client.
A DBA typically means that the legal representative agrees to accept a percentage of the damages awarded to the client as their fee instead of charging a fixed-fee or hourly rate. DBAs are on average less popular than a CFA largely because the total fees can be less certain), and DBAs in Personal Injury carry a 25% statutory cap that may limit recoverability.
With all these options, what should you do?
Ultimately, the choice of funding can significantly impact the claims process, both financially and in terms of the legal support available. Seeking advice from an experienced solicitor is invaluable in navigating these options, ensuring that clients are well-informed and equipped to make decisions that serve their best interests. By understanding the landscape of funding choices, individuals can more effectively pursue their rights and achieve the compensation they deserve.
Our specialist Solicitors in the Serious Injury Team can be contacted on 0800 157 7611 or by email at claim@moorebarlow.com. Our Team are experts in acting for injured persons to access rehabilitation, secure interim payments and recover compensation to rebuild lives.
