My solicitor has deducted 25% from my compensation. Is that correct?

If your solicitor acted under a no win no fee agreement in your personal injury claim then that agreement is likely to contain a cap of 25% on the fees that can be charged. But that does not mean that in every case 25% should be deducted. This is a maximum amount.

This agreement charges an hourly rate. But to reflect the level of risk the lawyer is taking on, that hourly rate is enhanced by a “success fee”, which is a percentage increase on that normal hourly rate. So the lawyer is paid more per hour for taking the risk of not getting paid at all, but subject to an overall cap on the maximum sum that can be charged, usually 25% of your compensation.

Many solicitors deliberately set the hourly rate high, and much higher than the hourly rate the court would allow you to recover from your opponent and they charge you the shortfall. If they have not explained to you what charges are likely to be recoverable from your opponent then this shortfall can be challenged.

The enhancement to the hourly rate (the success fee) remains payable by you, but is primarily meant to reflect the risk of losing the case, although it is permissible to charge a small percentage for other factors. But if this is the case the agreement must say so.

By law the success fee cannot be charged at more than 100% of the normal hourly rate. Many solicitors charge 100% in every case. If the success fee is not a proper reflection of the actual risk in your case then this can be challenged. A 100% success fee solely for the risk of losing, is only appropriate where the chance of success is 50/50. If you have an 80% chance of success the success fee to reflect that should only be 25% and if charged more than that it can be challenged.

Finally there are legal requirements that must be met to ensure the agreement itself is a valid agreement. If those requirements are not met the agreement is unenforceable and the solicitor cannot charge you anything at all.

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