There is growing concern amongst the public after reports of people being ripped off by unscrupulous claims management companies. Some people feel that they have not received the compensation they deserve and others have been alarmed to find that they have taken out loans to cover insurance costs without realising it. Whilst the government has implemented steps to regulate claims management companies in the form of a new Compensation Bill, there is still some way to go.

One of the reasons for instructing a solicitor from the outset is that solicitors are regulated. All activities are regulated by the Law Society who set down stringent codes of conduct which all solicitors must abide by. It is therefore a good idea to consult a solicitor rather than a claims management company, who can advise you for free as to whether a claim has any merit and whether it is worth pursuing. - a solicitor has a duty to act in the best interests of all their clients and potential clients and will advise you as to the best way to go about resolving legal issues.

More importantly than this, the fact remains that a claims management company is ultimately unable to litigate a claim. Whilst they rake in the claims and initial enquiries, all claims are eventually passed to solicitors. So why bother with the claims management companies in the first place?

We set out below how to instruct a solicitor and important points to bear in mind while doing so. There is little point having to pay a claims management company for passing on your details to a solicitor but it is worth ensuring that you instruct the best solicitor for you.

First Steps

A solicitor will advise you as to the viability of pursuing a claim. They will firstly consider Limitation. If you make a claim for personal injury then you will have three years from the date of the accident or the date that the wrong occurred to make your claim. If a claim is not made, then it will be statute barred and whilst it is possible to continue with the claim (a fact of which your solicitor must advise you) it is difficult to overcome Limitation without extremely good reason.

A solicitor will also consider the potential defendant in the case and whether it is worth pursing a claim against them. For example, you may have a good case, but if the defendant cannot be found or is bankrupt then there may be little point in pursuing a claim against them. A solicitor will advise you of the merits of pursing a claim and whether there are any ways around problems such as these.

As the claimant, it is up to you to prove that your version of events is true on a balance of probabilities. Your solicitor will consider whether there is any evidence and whether the defendant was in fact negligent.

Funding the claim

It is said that the no-win-no-fee (conditional fee agreement) should be the last resort. Under Rule 15 Solicitors Practice Rules 1999 the solicitor should explain to you all the possible methods of funding your case. This will included checking your household insurance and credit cards for legal expense cover.

Your solicitor should also explain to you the difference between your own solicitor’s costs and costs which may be awarded to the you if you win the case. It is important that your solicitor explains to you that if you lose the case you may have to pay your own solicitor's costs and your opponent’s costs. However, this risk may be covered by insurance. If you already have legal expense cover as part of your household expense or credit card insurance then this risk may already be covered. If not then legal expense insurance can be purchased and many companies allow claimants to defer payment of the premium until the outcome of the case. However, if you lose the case then whilst you may not have to pay your own solicitor’s costs, you may still incur your opponent's costs. It’s not all bad news though because most solicitors will have undertaken a stringent risk assessment of your case before advising you to pursue a claim and an insurance company may absorb the risk that if you lose the premium will not be recovered so that you will not have to pay anything. We are able to offer this to our clients as we have arrangements with insurance companies so that if you lose you will not have to pay anything. This is a service which claims management companies simply cannot offer as they are not able to undertake stringent risk assessments and as they are not regulated they are not trusted by the insurance industry to do so.

All of this information should be explained to you in a client care letter, sometimes known as a rule 15 letter. The letter should also cover other important aspects designed for your protection such as who to complain to if you are dissatisfied with the service you are getting.

Conditional Fee Agreements

This is commonly known as the no-win-no fee agreement. In essence, this means that if you lose the case you will not have to pay your own solicitors costs. However, you may still have to pay the other side’s costs. As explained above, the usual way around this is to purchase a legal expense cover (if you do not already have one).

It is important that your solicitor explains the entire agreement to you either in person or over the telephone. You should only sign the agreement once you are satisfied that you understand it all.

Legal Expense Insurance

Funding litigation can be a daunting prospect. However, usually it will follow two routes. If you have legal expense cover, either as part of your household insurance or credit card cover, then this will be used to cover the uncertainty of having to pay the other sides costs should the case be lost.

If you do not have legal insurance cover already in place, then you can purchase a cover. This is known as after-the-event insurance and the premium is recoverable from the other side if you win. As stated above, even if the case is lost there will usually be an arrangement in place so that nothing is payable by you.

Disbursements

In addition to your solicitor’s costs there are other expenses involved in litigation known as disbursements. These are court fees, fees for medical reports and the fees for hiring a barrister should the case proceed to trial.

All of these costs are recoverable from the other side. However, as for solicitor’s fees, in the event that the case is lost, it will be your responsibility as a claimant to pay them. As before though, this uncertainty is usually overcome by purchasing insurance.

Checklist

The following points are useful to have in mind when you instruct your solicitor

- Have they listened to you properly and advised you as to whether there is any merit in your claim?
Have you explored all possible methods of funding your case?
- Has your solicitor confirmed your instructions in writing and provided you with a rule 15 letter?
- Has your solicitor explained to you how your case will be funded?
- Has your solicitor explained the no-win-no-fee agreement to you satisfactorily?
- Do you have insurance in place to protect you should you lose the case?