Damages without tears

There is no amount of money that can adequately compensate a personal injury victim for the loss suffered. What is even more galling is when prohibitively high legal fees prevent those victims from enforcing their rights. However, as those now pursuing a case against the tobacco companies know, lack of funds or fear of bankruptcy need not always be an obstacle to pursuing a claim.

These litigants have entered into what are commonly known as "no-win no-fee" agreements. There are a number of schemes now available that offer help to potential litigants.

Until last year, personal injury claimants had fewer options. If they were wealthy enough they could fund their own lawsuit, or they might have legal expenses insurance or be funded by a trades union.

The other option, for those of extremely modest means, was to apply for legal aid. Outside these categories lay a large group of people for whom the costs of litigation and the fear and cost of losing were too high. An unsuccessful litigant is responsible not only for his own legal costs but also for a substantial proportion of the other side's.

Last year a change in the law helped those people who were falling through the net. Solicitors were, for the first time, allowed to charge conditional fees. In return for taking the risk of getting paid nothing, the claimant's solicitors negotiate a success fee if the case is won.

The risk of bearing the other side's costs if the case fails has been addressed by introducing a one-off insurance premium payment to cover this risk. The Law Society Accident Line Protect, which was launched last year, offers such a policy at a one-off payment of pounds 85. Once the litigant has paid the insurance premium, he or she has no need to worry further about legal fees.

As part of its service the Law Society operates a free legal advice line. The helpline will put the caller in touch with a specialist solicitor who, the Law Society assures us, has "proven competence in accident compensation cases". The Law Society maintains a list of personal injury specialists.

The solicitor will provide a free consultation without any obligation. The Law Society points out: "If the solicitor advises you to go ahead ... it means that he or she is confident that the case is likely to succeed. There is no need to worry about how much it will cost." This is because claimants that lose are under no obligation to pay their own legal adviser's fees, and the other side's costs should be covered by the terms of the insurance policy.

According to the Law Society: "Insurance companies all too often benefit from people's ignorance. In one case, a man was disabled for life. He was offered pounds 50,000, but his solicitor told him this was inadequate. At the last minute, at the door of the court, the insurance company changed its offer to pounds 250,000 and paid all legal costs."

Before commencing a personal injury claim, a potential litigant should ascertain from his solicitor how good the case is; the likely damages in the event of success; eligibility for legal aid. If the litigant decides to enter into a conditional-fee arrangement it may be worth shopping around in order to establish which firm is prepared to offer the most competitive deal.

The Law Society's agreement provides that the success fee (which is the percentage mark-up on the legal fees and is negotiable) should not be more than 25 per cent of the damages awarded or settlement negotiated.

The National Solicitors' Network also operates a service for personal injury litigants. The organisation has negotiated on behalf of its clients a one-off insurance premium covering them for legal costs if they lose the case of up to pounds 25,000.

The insurance cover requires a one-off insurance premium of pounds 175 plus insurance premium tax. Cover for costs of up to pounds 50,000 is available at a slightly higher premium.

Tom Goodman, a solicitor and personal injury specialist with the London law firm David Levene & Co, comments: "Conditional fee arrangements are a means for people who do not qualify for legal aid to pursue valid claims without the fear of facing huge legal costs if they lose"n Accident Line Protect: 0500 192939 National Solicitors' Network: 0171-244 6422