Injured in a crash? You may have been taken for a ride

A landmark court case has lifted the lid on the rip-off charges of no-win, no-fee injury lawyers for car crash claims. Now millions may be in line for a payout

CAR crash victims who used nowin, no-fee lawyers to fight personal injury claims may have been ripped off to the tune of hundreds of pounds.

One claims firm estimates that more than two million may have been overcharged by solicitors who asked clients to pay top rates for the most straightforward cases.

No-win, no-fee claims have boomed ever since the Government began to restrict and later abolish legal aid for personal injury cases in the 1990s.

Under current laws, solicitors make their money on cases they win with a ‘basic charge’ — usually £600 paid by the other driver’s insurance company for claims worth less than £10,000 — and a ‘success fee’ that comes out of their client’s damages.

This success fee is calculated as a percentage of the basic charge, so should not exceed £600 in most cases. And a Ministry of Justice cap also means that success fees should not be higher than 25 pc of the damages the claimant has won.

The fee must also reflect the risk taken in fighting the case. So an open-and-shut case should not require a huge success fee. But costs recovery firm Checkmylegalfees.

com says many personal injury lawyers have been ignoring how the success fee should be charged and taking a ‘ blanket rate’ of 25 pc against the compensation, rather than properly calculating the success fee.

It means that claimants with low-risk cases have been made to pay the same rates as those with claims less likely to succeed.

And some solicitors are charging 25 pc of the damages automatically.

A landmark Court of Appeal ruling last year found that one no-win, no-fee firm was not entitled to charge the maximum fee. A judge also found no clear evidence that the claimant had approved the costs incurred.

The former director of the Liverpool firm involved in the case, Hampson Hughes, confirmed that the company imposed a blanket rate of success fees across all similar claims.

In his witness statement he said: ‘I also know that many of our competitors charge success fees in the same way that we do.’

represents people who believe they have been overcharged by solicitors.

Checkmylegalfees.com THE

firm is understood to have won more than 100 cases in the past twoand-a-half years and has used the Court of Appeal judgment to win back fees for many of its clients. It has recovered £750 on average for each claimant. However, it can also charge success fees which are capped in the same way as personal injury claims.

This means claimants will be charged up to 25 pc of their damages through claiming their money back. Mark Carlisle, founder of

Checkmylegalfees. com, says that more than two million people may have been overcharged by a personal injury company.

He says: ‘ We conservatively estimate that the no-win, no-fee law firms have overcharged road traffic accident injury victims £2 billion.’

The overcharging may go back as far as 2013 when the 25 pc cap was introduced. It’s understood that many firms have changed their charging practices since the Court of Appeal case, in a bid to avoid further claims. Peter Corbett, 46, was approached by a secretary working for Raims Law within minutes of his accident in Manchester in February 2017.

He says a young employee of the firm ran over to the selfemployed joiner after she saw another car go into the back of his Vauxhall Vivaro in stationary traffic. Peter adds: ‘I felt harangued. I didn’t think she would go away unless I went with her back to the office.’

The Stockport resident ended up signing a conditional fee agreement in which he was told he would pay the firm 25 pc of his compensation if he won but nothing more in legal costs.

However, he was not told that the costs Raims Law could recover from the other motorist’s insurer were likely to be fixed at £600 and that he could end up paying a shortfall for the firm’s hourly rate charges.

Peter ended up receiving £3,700 in damages in June 2017, but he instructed Checkmy

legalfees.com when he realised Raims Law had taken a success fee of £925.

The High Court in Sheffield eventually ordered an £ 835 refund along with £ 60.53 in interest.

A Raims Law spokesman says that while it does not comment on individual cases, the practice of charging success fees was ‘not particularly clear’ before the April 2019 Court of Appeal case.

He adds: ‘ That decision has assisted solicitors with the way in which certain features of charging success fees is explained to their clients, and most solicitors have made the appropriate changes to their practices to avoid the types of problems that arose in [the case].’

A Law Society spokesman says: ‘Every case is unique and personal injury solicitors entering into a conditional fee agreement should never assume a success fee of 25 pc applies to all cases.’

An Association of Personal Injury Lawyers spokesman says: ‘Solicitors must act in the best interest of their clients and this includes providing a clear explanation of their fees.’ f.parker@dailymail.co.uk