One of Claire Collinson Legal’s central values is “reasonable and certain costs”. We provide full transparency on costs. At the outset of each claim, and at regular points during the claim, assessments are carried out to identify the most appropriate costs option. Factors taken into account include:
- The amount in dispute
- The complexity of the case
- Your financial circumstances
- The amount of work needed to do the work
There are basically four types of funding method for these disputes:
- Fixed fees
- Hourly rates, based on cost estimates
- Conditional Fee Agreements
- Contingency Fee Agreements
We will offer one or more of the first three options on each dispute, all of which are sensible and appropriate for these cases. For the reasons explained below, we do not offer Contingency Fee Agreements and strongly recommend that they be avoided. Dealing with each method:
1. Fixed fee. A cost quotation will provide a certain and fixed fee for the work to be done on either part of or the whole of a claim. A fixed fee is payable whatever the outcome of the claim and will not be discounted or increased. This provides absolute certainty of costs before the work is carried out. Payment by instalments is possible.
2. Hourly rates based on cost estimates. An estimate of costs to be incurred for either part or all of the case is provided before the work is carried out. The estimate is regularly checked and updated. If less time is spent than estimated, a lower fee is charged, but the estimate may be increased upwards as the case progresses if more time is spent than initially anticipated. This option provides clarity of costs and flexibility.
3. Conditional Fee Agreements (CFAs). A CFA is an agreement whereby a client pays his / her solicitor a different level of costs depending on whether the case is won or lost. A full CFA is a “No Win, No Fee” type agreement where no costs are paid if the case is lost, but if the case is won the solicitor charges a “success fee” in addition to the normal hourly rate. The success fee is usually based on the time spent on the case and cannot exceed 100% of the costs incurred on a normal basis (ie if the total costs were £2000, on a full CFA, the client would pay £0 if the case was lost and a maximum of £4000 if the case was won). We are prepared to consider partial CFAs whereby a discounted fee is paid if a case is lost and a higher fee paid if a case is won. We do not usually offer full CFAs.
We will carefully assess the suitability of CFAs before offering them to ensure that the costs would be proportionate to the money recovered, if successful. Total costs of £4,000, for example, would be proportionate to a claim worth say £80,000, but not to a claim worth £10,000.
4. Contingency Fee Agreements. These agreements are similar to CFAs in that different charges are made depending on whether the claim is successful or not. The major difference is that if the claim is successful the amount due to the adviser is not based on time spent (and therefore related to the value of the work done), but is expressed as a percentage of the compensation recovered.
For example, an agreement offering “No result, no fee, but payment of 25% of the winnings if successful” will have the following effect. Assume a critical illness claim of £80,000. If successful, the adviser will be entitled to £20,000, reducing the recovered insurance to £60,000. Unless the claim was unusually complex, such complaints to the Financial Ombudsman Service could be completed by an adviser within a maximum of 20 to 30 hours work (£1500 to £2250 on the above rates).
In this example the adviser would have a success fee of around 1000% (based on the rates and likely time spent as noted above).
These agreements are often not appropriate for these types of cases as they are likely to deplete any compensation by far more than the value of the work done and we recommend that they be avoided in favour of one of the above, more reasonable options.