Topics which play a part in accident and personal injury compensation
Legal aid
It is a thing of the past in most personal injury cases. It was a system set up for the right reasons, to allow those who could not afford a solicitor, to use one. It became expensive so the Government changed the rules, made conditional fee arrangements possible, and gave an incentive to solicitors to take on less than straightforward cases by allowing an enhanced fee in the event of success.
Legal expenses insurance
Lots of people have this insurance as part of policies on their car or house, or might buy it as a stand alone policy. The policy will allow you to pursue a compensation case, and cover your liability to pay your own solicitor’s costs and disbursements, and those of the other side if your case fails.
Your legal expenses insurer must be satisfied the case has reasonable prospects of success, and this is necessary all through the case. Just like the after the event insurance the insurer can pull out if those prospects are no longer reasonable.
The policy will have an indemnity level, which is the maximum the legal expenses insurer will pay. You cannot increase the amount of this indemnity, so if the risk in your case is greater than the amount of the policy indemnity you may be advised to use after the event insurance to cover the remaining risk.
Some legal expense insurers will insist you use solicitors they nominate. They may have a trusted panel of solicitors, or more likely they will receive payment from the solicitor to whom they refer the case, a referral fee. The insurer is not entitled to insist you use their panel case, particularly if your case is not run of the mill. Do ask your insurer about the financial arrangements they have with their panel solicitors. You should be sure the solicitors will be committed to your case, and not be too worried about presenting a bill to the legal expenses insurer.
No win no fee
No win no fee is not an accurate term, and it does not tell you the whole story. The whole story might be boring, but until you have heard it you will not understand. Your only question is “Will it cost me anything?” to which the answer will be “It depends.” So read the whole story and understand.
In our compensation the successful claimant usually receives compensation and has their legal costs paid by the other side. The other side is usually insured. Having your costs paid is not an automatic right. It is either build into any settlement you reach, or it is at the discretion of the trial Judge. There is no guarantee, but usually costs follow the event, which means the loser pays.
The amount of the costs you can recover depends on what is called the indemnity principle. The party paying costs will be reimbursing you for the amount you are contractually bound to pay to your solicitor. Your solicitor cannot just present a bill and expect a cheque. So you must be liable to pay your solicitor, as without that liability you cannot be indemnified by the other side. They cannot cover your bill if one does not exist.
So when you sign up to a “no win no fee” agreement you will be signing a document which says you will pay £X per hour plus VAT in the event that the case succeeds. You become liable to pay when your case succeeds, and the other side will effectively pick up your bill.
What about the possibility that your case fails. The “no fee” bit only covers your own solicitors hourly rate, and any success fee. What about your own disbursements, and the costs and disbursements of the other side. A very clever form of insurance was created to deal with this problem called after the event insurance. It insures this risk in return for a premium, and is banking on your own solicitor’s judgment. Surely they would not be running the case if it is not going to succeed? Well that is usually the outcome, but the odd one goes wrong, and you will be glad the insurance was taken out. The premium for this insurance can be recovered from the other side if the case succeeds, and as many insurers will wait until the end of he case to be paid, there is no good reason not to take out this insurance. The only reason why this insurance is not so grand is that the cover it provides can be limited. An indemnity level will be set at the outcome, say £25,000, and that is the maximum the insurer will be liable to pay. This level can sometimes be increased, but there is no guarantee and an increase can be expensive, and not necessarily recoverable from the other side. Best you get the level of cover right in the first place. Once you have the policy the cover is reviewed. The insurer must always be satisfied the case has reasonable prospects of success, so if the balance tilts away from you, the insurer may pull out. Rather like insuring a car, but having to phone your insurer if the weather forecast is bad. On balance you ought to have this insurance, on the basis the why not argument is stronger.
Credit hire companies provide and repair vehicles after an accident when someone is to blame. They can help protect your insurance record, and that means your premium and no claims bonus.
Their business is based on you being blameless, and someone else being responsible, and that person having insurance.
The situation usually looks like this. Your vehicle is off the road for repairs and you need a replacement car for a fortnight. Your own insurer may not be keen to give a courtesy car, and the body shop has none available. Do you take taxis or hire a car, and can you afford the expense? Credit hire and repair give you an option. You sign an agreement accepting liability for the cost of hire and repair, and if the hirer is confident someone else is to blame, and they have insurance in place, they will provide a vehicle. The idea is to recover the cost from the insurer of the person to blame, and you pay nothing.
The benefit to you is that you do not have to make a claim on your own insurance. If you make a claim on your own policy your premium will increase and your no claims bonus will be affected. If your own insurer pays your record is affected, even when someone else is to blame.
Some insurance companies will chase for reimbursement from the insurer of the driver to blame, but many do not.
Credit hire companies do get stick for their hire rates, but to be fair they do exist because insurers will not pay for alternative transport when your car is in for repair. The respectable credit hire companies have agreements on rates with the insurance industry. There are good and bad credit hire companies. For them to be paid you must be liable to pay the hire. You must beware of ending up with the bill in your hand. Take advice from an experienced solicitor who knows the work of the credit hire company.
Not all insurers are tight on courtesy vehicles, but if you have bought your policy on price do not expect first class service. If an insurance company offers a courtesy car the expense is usually covered by the body shop doing your repairs, or by a credit hire company. The insurance companies have found ways of providing a service without bearing the cost. That is to their credit as it allows them to be competitive on premiums, and cheap premiums are what we want.
Politics of compensation
Newspaper headlines tell you of large compensation awards, fraudulent claims, or the rising cost of road accident claims to insurers. What you do not read is how organisations are reimbursed as a result of a compensation case being brought.
After a road accident the Government can recover up to £505 for accident and emergency treatment, and £620 per day for inpatient treatment. The maximum recoverable is £37,100. An additional payment for ambulance call out is £159. The money is only paid if the person treated by the NHS makes a successful claim. The payment is made by the insurance company of the party responsible for the accident or injury.
When state benefits are paid after an accident or injury they are repaid to the Government by the insurance company of the person or party responsible for the injury. This can be a little complicated as not all benefits are repayable. The system is called “recoupment” as the benefits are recouped when a compensation case is successful. You claim your financial losses, the benefits you have received are deducted from those losses, and the insurance company pays the benefits back to the Government. You should view the benefits you receive as payments on account of compensation. The advantage of benefits is you receive them because you are injured, and you receive them immediately. You only get compensation if you can prove someone is at fault, and the payment is usually received when the case ends.
Some employer contracts mean sick pay received after an accident for which you recover compensation, is repayable to the employer. Be careful your solicitor checks with the employer to avoid an unnecessary squabble with your employer. Do not worry about these clauses as they are quite common. The sum due to the employer is added to the calculation of the claim. The insurance company for the person or party responsible pays, so you still recover your actual losses.
Medical insurers, like our friends at BUPA, have a clause which means you are liable to repay their outlay for treatment after an accident for which you recover compensation. If your case is successful you must repay your insurer. Just like the employer situation you include the expenditure in your claim, and is is repaid to the medical insurer. The repayment is effectively made by the insurance company of the person or party responsible for your injury.
Insurance companies regularly recover their expense. If your car has to be repaired after an accident which is someone else’s fault, you might turn to your own fully comprehensive insurance company to cover the cost. If you have an injury or other losses you can claim against the person at fault, and when you succeed your own insurer is repaid for their outlay. This is a positive for you, as once repaid, your own insurer will not penalise you for claiming on your policy. Insurance companies make claims too.
Insurance companies used to operate a “knock for knock” arrangement for motor policies. An insurer would say to itself that its drivers were going to be involved in accidents, some would be their driver’s fault, and some would not. Rather than squabbling with other insurance companies why not cover our own losses. It was a sensible arrangement between the insurance companies, as it kept their costs down. Whether it suited the motorist is another question, as your insurer might treat you as having made a claim on your policy even when the accident was not your fault. In recent times the “knock for knock” agreements have fallen away, as new insurers have entered the market and not wanted to play by the old rules. It can mean that if you claim on your own policy when someone else is at fault you will be penalised when you renew, as your insurer has paid out on your policy. If you want to avoid this you have to seek compensation, and it is not the responsibility of the insurer to recover their expense.
Insurance companies receive income by referring compensation cases to solicitors. It is perfectly legitimate to pay and receive referral fees so long as those involved satisfy the Referral Fee and Claims Management regulations. This means you should be told that a referral fee is being charged, or paid, and how much. It does feel odd that insurance companies complain on the one hand about the number of compensation claims being made, and on the other identify people who can make claims and refer them to solicitors in return for payment. Short term business is about income, so who can blame the insurers. Estimating conservatively the average referral fee for a road traffic accident case is £700.
Trade Unions are in favour of compensation claims. They provide a service to their membership, and if the cases are managed properly they can make money. In the explanation of conditional fee agreements and after the event insurance it is explained how the cost of that insurance is paid for in addition to your solicitors costs. Trade Unions are doing the same job as an after the event insurer, as the Trade Union would pick up your legal bill if the case failed. In return for that risk a Trade Union can recover a premium equivalent in successful cases. The system is designed to allow the union to build a fighting fund to pay for the costs in failed cases. If they do not lose money the system means income for the trade union. Not all unions operate this system, and if they do the premium equivalent will vary, but £500 per case looks like a conservative estimate.
Claims management companies exist to attract those who may have compensation claims. You have seen their advertising and catchy slogans. They have very effectively put themselves between the solicitor and their client. Many solicitors have given up on any form of marketing, and just buy cases from the claims management companies. Claims management is a perfectly legitimate business, only recently regulated. Regulation is designed to stop cold calling and silly promises. The referral fees charged to solicitors plus other income from insurance and expert evidence agency arrangements conservatively amount to £1,000 per case. You should not pay for any of this expense. It is the solicitors expense, and you should not see any deduction from your compensation. If your arrangement means you pay anything you should say no. The referral fee is the solicitors marketing expense, not yours.
Credit hire companies provide vehicles, and undertake repairs, after an accident for which someone is to blame. They fall under the claims management company umbrella. If they refer personal injury cases they fall under the same regulation. It is an interesting business, based on you being blameless, and someone else being responsible. Lets say your car or motorcycle is off the road for repairs and you need a replacement car or motorcycle for a fortnight. Your own insurer may not be keen to give a courtesy car, and the body shop has none available. Do you take taxis or hire a car, or do you use credit hire? If you take a credit hire you sign an agreement accepting liability for the cost of hire. If the hirer is confident someone else is to blame, and insurance is in place, they will provide a vehicle. The idea is to recover the hire from the insurer of the person to blame, and you pay nothing. Credit repair may also be available on a similar basis. Credit hire companies do get criticised for their hire rates, but to be fair they do exist because insurers will not pay for alternative transport when your car or motorcycle is in for repair.
Alternative transport may be offered by your own insurance company. However, if you have bought your insurance policy on price do not expect first class service. If an insurance company offers a courtesy car the expense is usually covered by the body shop doing your repairs, or by a credit hire company. The insurance companies have found ways of providing a service without bearing the cost. That is to their credit as it allows them to be competitive on premiums. There are good and bad credit hire companies. For them to be paid you must be liable to pay the hire. You must beware of ending up with the bill in your hand. Take advice from an experienced solicitor who knows the work of the credit hire company.
Good or bad thing
The need to seek compensation must be a bad thing, but the ability to recover it must be a good thing.
Nobody wants to be injured so nobody wants compensation. If something does go wrong then compensation can help put things right, but only financially. The big awards you see in the newspapers are for people who require expensive care regimes. They do not receive £3 million plus because their injury was awful, they receive it because they are young and will have to spend it on a care regime which allows some semblance of independence. The most serious injury is rarely worth more than £250,000, so in a big award you will see most of the money is for future expense. £3 million might look like a lot of money, but when you understand how the system works you would not trade it in exchange for a future without disability.
There are many causes of brain injury. Acquired brain injury is a term which covers all situations in which brain injury has occurred since birth, and includes injury from trauma/injury, as well as tumour, stroke, haemorrhage and encephalitis, as examples.
This post deals with injury caused by accidents, sometimes called traumatic brain injury. You might think the trauma has to be significant, but experience shows what looks like a minor event can cause an injury.
Brain injury is first caused by outside force, but then complications can follow, such as damage caused by lack of oxygen, and rising pressure and swelling in the brain.
The effects are described at different levels of severity using mild, moderate and severe. We find the mild injuries most difficult as the problem is not always spotted early. Medical staff tend to deal with the physical injury but do not spot the acquired brain injury. A minor injury (15 minutes unconscious or 1 hour post trauma memory loss), can mean symptoms including nausea, headaches, dizziness, impaired concentration, memory problems, extreme tiredness, intolerance to light and noise, and can lead to anxiety and depression. Not minor problems really. Help and support is necessary, but of course the problem has to be spotted. Most minor injuries will have recovered within 4 to 6 months.
A moderate injury (up to 6 hours unconscious or up to 24 hours post trauma memory loss) has symptoms including tiredness, headaches and dizziness. Add to these difficulties with thinking, attention, memory planning, organising, concentration and word-finding problems. These symptoms are accompanied by understandable worry and anxiety, leading to anxiety. If the problem is spotted early and the likely effects explained, the path of the injured person can be smoothed. Without that warning every day life can be very difficult. Overall recovery is likely in most cases but may take up to 9 months.
You will appreciate your solicitor must have an understanding and experience of the effects of such an injury. Without that how are we to work together?
You will see from the list below there are organisations whose focus is on children. The treatment of head injuries has a divide based on age. Paediatric departments tend to lose interest beyond the age of sixteen, and the adult services may not be ready to provide the support. There are educational needs which may have to be pursued vigorously if the best outcome is to be achieved. A child is represented through their parents, but as before, an acute awareness of the needs of such an injured child is necessary if the compensation process is to help.
There are some very informative sites of organisations whose main interest is head injury so do learn more at:
A fatal accident caused by the fault of another can be compensated. The people entitled and how much compensation is due must be considered carefully. Most of the rules are set by Statute, and it is a shame the law has not kept up to date with social change. I hope there will be changes in the future which help all those left in difficult circumstances by a fatal accident.
The law set out below is current at July 2009. The law was different before, and may be different after, so use this page for information and contact us to weigh up your own circumstances.
There are two statutes which outline what can be recovered. These are Law Reform (Miscellaneous Provisions) Act 1934 and the Fatal Accidents Act 1976. Both Acts have been amended and updated.
1. The Law Reform legislation means that death does not bring to an end a persons ability to recover compensation for injury and loss. This law is only relevant where death is not instantaneous. It would allow the representatives of a deceased person to recover compensation for injury and financial loss between an accident/injury and death. The action is brought by the deceased’s Estate, by Executors if there is a Will, and Personal Representatives if there is no will (known as intestacy). The principles which apply to calculating compensation for injury and loss are the same as those used for claimants who are alive.
The Fatal Accidents Act allows two further claims claims to be made, but the relationships between individuals are important.
2. In the case of a death after 1 January 2008 a bereavement award of £11,800 is payable to the spouse or civil partner of the deceased, or if the deceased was below 18 years of age and had not married, the parents are entitled to this award. Please note that at this time “partners,” and/or “common law” husbands or wives are not entitled to a bereavement award.
3. Reasonable funeral expenses can be recovered.
4. The Fatal Accidents Act then allows a claim to be brought for financial “dependants” of the deceased. Again the persons who may be entitled are defined, and more liberally than the persons entitled to the bereavement award. Dependants are:
(a) the wife or husband or former wife or husband of the deceased (and Civil Partners);
(b) any person who—
(i) was living with the deceased in the same household immediately before the date of the death; and
(ii) had been living with the deceased in the same household for at least two years before that date; and
(iii) was living during the whole of that period as the husband or wife of the deceased;
(c) any parent or other ascendant of the deceased;
(d) any person who was treated by the deceased as his parent;
(e) any child or other descendant of the deceased;
(f) any person (not being a child of the deceased) who, in the case of any marriage to which the deceased was at any time a party, was treated by the deceased as a child of the family in relation to that marriage;
(g) any person who is, or is the issue of, a brother, sister, uncle or aunt of the deceased.
The section above is a direct quote from the legislation, except for the addition of Civil partners too point (a).
You will appreciate great care has to be taken to establish who is entitled to compensation.
You may seek compensation for the loss of financial support if you are a dependant. Compensation is awarded for the loss of the victim’s financial support and services since his or her death. This consists of the portion of the deceased’s income devoted to the family or dependants, the home and other outgoings, together with compensation for any services that the victim provided, such as childcare, domestic assistance, gardening or DIY.
The financial basis for dependancy varies in each case so it would be misleading to set out guideline figures.
Only one action can be brought in respect of a death, so it is vital that all possible claims are identified.
The action can be brought by the Executors or Personal Representatives, but if they do not take up the case, those entitled under the rules may put forward the case, but the warning above should be noted.
The media reported the rare case of Linda Walker whose Geordie accent had turned Jamaican after suffering a stroke.
She was diagnosed with Foreign Accent Syndrome, a rare neurological condition that is caused by damage to the brain.
Having grown up in the Westerhope area of Newcastle she had naturally acquired a Geordie accent. She had spoken with this accent for over 60 years of her life.
When she found out that it had changed to a Jamaican accent she became very down and no longer felt like she was the same person. She felt that she had lost her identity.
The result of Foreign Accent Syndrome is a drawing out or clipping of the vowels that mimic the accent of a particular country, such as Spain or France, even though the sufferer has limited exposure to that accent. The syndrome was first identified during the Second World War when a Norwegian woman suffered shrapnel damage to her brain. She developed a German accent, which led to her being ostracised by her community.
It is a rare result of an acquired brain injury. When people suffer from this rare condition it is often hard for others to understand just how serious the affects can be.