There are multiple ways to deal with the legal costs involved in investigating a clinical negligence claim. At Nelsons, we will always ensure that you are informed about the various ways you can fund your claim and discuss what might be available and suited to your circumstances.
Funding options
1. Before the Event Insurance (also known as ‘legal expenses insurance’)
It may be possible that you have existing insurance that can be used to fund your claim. We recommend that you check any insurance policies you had in place at the time of the alleged negligence for Legal Expenses Insurance (LEI) or contact your insurance provider to enquire if you are able to use this insurance to fund a clinical negligence claim.
BTE policies come in all shapes and sizes, and some are more generous than others. Some policies will only cover legal costs up to a certain amount. However, if you have existing legal expenses insurance it may cover some or all of the disbursements (other costs such as expert reports and Court fees) of your case as well as some or all of the legal costs (solicitor fees).
However, it is important to remember that some BTE insurance providers will only cover the cost of a claim if you use a solicitor on their panel, at least during the initial investigations. If your BTE insurer indicates that they will only fund a claim if you use one of their panel solicitors, we still recommend contacting your solicitor of choice as they may be able to agree on terms with the insurer that allow them to act.
At Nelsons, we work with clients covered by a variety of BTE insurers. We are always happy to discuss Legal Expenses Insurance with you and contact your insurance provider on your behalf to explore the option of using your existing insurance to fund your claim.
2. Conditional Fee Agreements (CFA)
A Conditional Fee Agreement, commonly referred to as a No Win No Fee Agreement, is the most common form of funding for a clinical negligence claim. A CFA is a contractual agreement and like any contract there are terms and conditions which need to be observed. Providing these are followed should your case be unsuccessful you should not be liable for any solicitors’ fees.
When considering whether to act under a CFA a solicitor will look at the merits of the potential claim and the prospects of the claim succeeding, based on the information available at the time. At Nelsons, in order for us to offer a CFA the claim must appear to have at least a 51% chance of succeeding and we also consider the potential costs which may be incurred as against the likely amount of compensation.
Under a CFA if your claim is unsuccessful and you abide by all the terms of the agreement you should not be liable to pay for any of the solicitor’s fees. If your claim is successful, the solicitors are entitled to charge a ‘success fee’.
The success fee payable by the client is calculated as a percentage of the solicitors’ fees for time spent working on the case and is typically deducted from the compensation. The percentage will be clearly set out in your CFA but the solicitor cannot predict what this will equate to in monetary terms, as it would depend upon the level of solicitors’ fees incurred by the conclusion of the case (and whether the ‘cap’, referred to below, applies).
The success fee is capped, meaning the amount deducted from your overall compensation for this cannot be more than 25% of the compensation awarded for general damages (for pain, suffering, and loss of amenity caused by the alleged negligence) and past losses (compensation for other losses incurred up until the date of any trial).
Solicitors often use hourly rates to calculate their fees. The hourly rate will be set out in the CFA, however, this is susceptible to review and may increase. Your solicitor should inform you of any increase and also keep you updated in relation to the overall costs of your case as it goes along.
At Nelsons, the majority of our clinical negligence cases are funded by a CFA. Your appointed solicitor will always strive to answer all of your questions in relation to any agreements you enter into. However, it is essential that you carefully read any agreement and ensure that you understand it and its implications before you sign.
3. After the Event Insurance (ATE)
If you have entered into a CFA agreement with your solicitor, it is likely that they will also recommend taking out ATE insurance.
If your claim is successful, more likely than not the defendant will be liable to pay the majority of the legal costs of the claim, including the disbursements (expert reports, Court fees etc.). However, if the claim is unsuccessful then these disbursements cannot be recovered from your opponent, and they are not covered by the CFA (which relates only to the solicitors’ fees).
This means that, if a claim is unsuccessful, it is the client’s responsibility to pay any disbursements that have been incurred. However, it is usually possible in a clinical negligence claim for clients to obtain ATE insurance to cover these disbursements in the event of an unsuccessful claim.
ATE insurance may also cover the risk of any adverse cost orders (orders that you should have to pay your opponent’s costs). For example, one way to settle a claim is through an offer known as a part 36 offer. If you reject a part 36 offer to settle, one of the conditions is if you later fail to obtain an outcome more advantageous (e.g. a higher amount than the offer) you will likely be liable to pay some of the other parties’ costs. Provided the ATE insurance provider gave the authority to reject the offer, the insurance would normally cover any adverse costs.
ATE insurance works in a similar way to a CFA. If your claim is unsuccessful, and you have abided by the terms of the insurance, you should not be liable to pay any costs and there will be no premium payable. If your claim is successful, you will be liable to pay part of the insurance premium.
At Nelsons, we do recommend to almost all of our clients who enter into a CFA to take out ATE Insurance.
4. Legal Aid
Only certain claims involving claimants who have sustained a brain injury at or around the time of birth are eligible for legal aid in a clinical negligence claim. The specific requirements are:
- There is a neurological injury resulting in a physical and or mental disability.
- The injury must have been caused by clinical negligence.
- The negligence must have occurred while the individual was in the womb or during their birth or within 8 weeks after their birth.
- The person must show that they were born during or after the 37th week of their mother’s pregnancy.
Obtaining legal aid can be difficult and not all solicitors are able to work on a case with legal aid. Nelsons is able to do so and would be happy to discuss with you whether or not this type of funding could be available.
5. Trade union funding
If you are a member of a trade union, it may be possible that your union will provide legal advice or assistance for personal injury claims (including clinical negligence).
If you are not currently a member of a trade union, but you were at the time the negligence occurred, it may still be possible that the union will provide assistance and/or funding for legal expenses.
If either of the above apply, we would recommend contacting your union to see what, if any, assistance can be offered prior to instructing a particular firm of solicitors.
6. Private funding
Paying privately used to be common practice. However, this method of funding is no longer so common. If you wish to pay privately you will be responsible for the solicitors’ fees and the disbursements if your claim is unsuccessful. If your claim is successful, you may be able to recover your reasonable costs from your opponent though there could still be some costs that you would be liable to pay to the solicitors.
Solicitors will give their overall best estimate of the likely total costs and will provide breakdowns of their work and costs. It is common practice that solicitors ask for payments on account of their fees before undertaking any work and/or during the course of the case.
A solicitor’s hourly rate will vary from firm to firm and will also depend on the location of the firm and the solicitor’s individual experience. Hourly rates are also subject to increase; however, you will be notified by your solicitor of any increase.
Clinical negligence cases are costly and time-consuming; therefore, it is not common for people to pay for an entire clinical negligence case privately.
It is important that you consider what funding option would be best for you and your individual circumstances. For more information on funding please speak to a solicitor or visit the AvMA website.
How can we help?
Shannon Gray is a Paralegal in our expert Medical Negligence team, which is ranked in tier one by the independently researched publication, The Legal 500.
If you have any questions concerning the subjects discussed in this article, please do not hesitate to contact Shannon in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online enquiry form.
Contact us