Is keeping 100% of your compensation in your best interest?

A cake with slice cut

So that sounds daft. Of course keeping 100% of your damages after a successful compensation claim is in your best interest - why wouldn’t it be? (And we aren’t talking tax, as compensation isn’t taxable in the UK.)

However, the answer (surprisingly) is slightly more complicated.

Many businesses, claims companies and law firms -- on the surface at least -- offer to do the case for nothing as you, the client, will keep the full 100% of the compensation awarded. But is this even possible?  For many it seems too good to be true and you need to understand that a compensation claim is complicated and requires an experienced, legally qualified person to successfully achieve the right outcome. These cases are expensive to prepare, require many outlays (costs) and all of this takes time which someone has to pay for. So how are such businesses and claims companies able to offer 100%?

The answer is simple -- they get paid by the other side if they are successful. The legal system says that, in general, whoever loses the case pays all the costs. In most cases, that often means they are paid by an insurance company. So it begs the question – how do you know the settlement you’re being offered is the right amount? How do you know your case was fully investigated?  How do you know if your injuries were properly assessed for future issues? Was your case raised in court?  Maybe the answer to all of that is: yes.

The most important aspect of this is they can’t lose or they don’t get paid and the insurance company knows this information and uses it to never pay the true cost of the settlement. It is likely that at least 20% and up to 50% of the true value will be lost. Of course, you’ll never know that because you’ll never find out what the true value was.

100% compensation model - questions you need to ask yourself

1. If they don’t charge you anything, how do you know that your settlement figure is fair?

2. If they aren’t taking any money from you, is it in their interest to get you the highest possible sum of compensation?

3. Properly investigating and preparing a case is expensive -- how do they fund this (could it even be you)?

4. If they aren’t fully preparing cases, will they just accept the first offer they are given on your behalf?

5. Are they prepared to pay for your case to go to court if necessary?

6. If they aren’t prepared to go to court, how do they force the other side to award you a fair settlement?

Essentially, these firms will be paid expenses and fees from the other side’s insurers but it is unlikely they will have the money or resources to fully investigate and prepare your case, which could lead to your case being under-settled.

We know there are always exceptions to this rule but please don’t fall for the glib headline claiming “keep all your damages” or “100% compensation”.

How much is the right amount?

How do you know the amount of money you’re being offered for pain or suffering is fair? How do you know the person who is calculating your future loss of earnings is doing so properly – especially if you might not be able to continue the job you love in five years’ time? Do you trust an organisation to give you best advice when it means more work for little or no reward for them?

Simple answer is: you don’t know. You (understandably) will be relying on your legal advisor and trust their judgement on what is a fair settlement. 

Another thing to be wary of is a compensation calculator. That is because everyone is different and everyone’s injuries affect their lives differently. So the margin for error in these ‘calculations’ is huge as they rarely take your unique circumstances into account.

No win no fee: not a lot of point

We know of other businesses who will offer a “no win no fee” model but will then ask for certain payments for reports or other expenses. They also might have a clause which says that this funding model stops if the defenders of the court action refuse to settle and want to go to court. Then, sadly, if you go ahead -- the risk is all on you.

Compensate funding for personal injury claims

Digby Brown does take a percentage of your personal injury compensation award. We do offer no win no fee funding as it ensures victims of a personal injury can access justice without any financial risk to themselves - meaning if the case doesn’t work out, they won’t pay a penny.

Although we take a percentage (usually no more than 20% including VAT), we believe that you are still a lot better off in the long run. A firm which charges a success fee is a clear indication they have the resources, expertise and motivation to spend the time required to fully explore your personal injury case and employ the very best expert witnesses and advocates. Importantly they can also take cases to court if necessary (that doesn’t mean you go to court, it means raising a court action to let the defender know they are serious). We want to achieve the very best result for you as that pays for the time we have spent properly investigating what happened.

Having the power to litigate (take the case to court) ensures your case is taken seriously by the insurers – we won’t be pushed around and they know it. 

Why is it important to investigate a personal injury claim?

In the majority of personal injury cases, you will be dealing with an insurance company. The reality is that their main priority is to offer as little money as possible.

In many cases, the person at fault is not debated so the argument is not about who is to blame for the accident but about the amount of compensation a person deserves..

If there is not enough financial support to completely investigate the case and prepare the case for court, if needed, the insurance company can get away with under-settling the claim.

To value a personal injury claim, it is critical that the personal injury solicitor fully understands the nature of your injuries and the long-term effects of those injuries. For example;

1. Will your injuries impact your ability to work now and in the future?

2. Will your injuries prevent you from being able to do the same job?

3. Will your injury cause any long-term effects?

To correctly answer these types of questions, your personal injury solicitor must engage with experts in a number of fields to gather expert reports. This evidence helps establish the right level of compensation you will need to put you back in the position you were in before your accident. What is the ‘right amount’? As much as possible!

However, all these experts cost money and not all funding solutions will pay for these expert reports to fully prepare your case. At Digby Brown, our model funding means WE pay for these reports – not you. However, not all law firms or claims companies do this, so that’s why you need to be mindful.

Facts speak for themselves…

Our experience and statistics show time and time again our personal injury solicitors will achieve the correct level of compensation -- which will be substantially more than the insurer is initially prepared to offer.

Our team represented a couple involved in a road traffic accident after they had already been offered £1,250 each by the insurers of the driver who caused the crash. But once they came to Digby Brown, through diligent investigations and robust no nonsense negotiations, the couple’s cases finally settled for £5,000 and £7,000. This is a fairly common experience with cases in Digby Brown and clearly shows how insurers frequently try to pay out as little as possible. And when it comes to the issue of the success fee, in this case our clients received £4,000 and £5,600 respectively, which, as discussed earlier, proves they were better off in the long run.

Don’t take our word for it, just read many of the court decisions and case studies on our website.