Personal Finance: Counting the cost in the courtroom

Suing for compensation? You need some good insurance

Britain is being taken over by a "culture of compensation" with would-be claimants determined to win a pay-out for every little misfortune, a leading think-tank claimed this week.

In a report for the Centre for Policy Studies, Dr Frank Furedi warns: "The culture of compensation is increasingly becoming separated from legal principles. It is interested primarily in finding someone who can be found liable and who can pay - and not in the issue of responsibility."

But just as bad as a society where everyone sues one another at the drop of a hat is one where the vast majority of people are effectively denied access to courts. Until a few years ago, pursuing civil damages in Britain was a realistic option only for the very rich or the very poor. The rich could afford to pay lawyer's fees out of their own pocket if they lost the case, and the poor got Legal Aid. Everyone else was trapped in the middle.

That began to change in the summer of 1995, with the introduction of "no-win, no-fee" actions which mean you not need pay your own solicitor's fees if he fails to win the case.

Law Society spokesman David McNeil says: "You don't pay your solicitor's fees if you lose. However, there may be other expenses, such as the cost of expert-witness testimony, court fees, and the cost of insurance."

Unlike in the US, British law insists that the loser of a civil case pays both sides' costs. This makes it essential to take out a policy which will meet your opponent's legal fees if you lose. "`No-win, no-fee' is a bit of a misnomer," McNeil says. "It's really `No-win, no-your-own-solicitor's- fees'."

This arrangement is generally used for straightforward personal injury cases, arising from motor accidents, pavement falls or injuries at work. Solicitors are not obliged to take any case on this basis, and may ask you to pay a conventional hourly fee or take your business elsewhere. If you win your case, your solicitor will be rewarded with his normal fee (paid by your opponent), plus a "success fee" (paid out of your damages). Legislation to shift liability for the success fee to the losing party is currently in progress.

Other safeguards ensure that the success fee cannot exceed either 100 per cent of the main fee, or 25 per cent of the damages you win - whichever is the smaller.

McNeil says about 65,000 cases have been settled on conditional fees since the option was brought in. But even if you cannot persuade a local solicitor to take your case on this basis, a little-known clause in many household insurance policies could pay for the legal representation you need.

Legal expenses cover worth up to pounds 50,000 is included in many household insurance contracts, either as a cheap bolt-on extra or as automatic part of the main policy. This cover can be used in cases like a contract dispute over goods you have bought privately or to resolve a dispute between you and an inconsiderate neighbour.

Paul Asplin, the managing director of DAS Legal Expenses Insurance, says: "We ask that the case you want to take up has a reasonable prospect of success. It wouldn't make sense if we backed hopeless cases, like wanting to sue your neighbour because you don't like the fact that he wears a red shirt on a Sunday morning."

A "reasonable" prospect of success in DAS's case means a better than 50/50 chance you will win. "Fifty-one per cent would do nicely," Mr Asplin says. "It's quite a low test."

Similar cover often appears on motor policies, sometimes without the policyholder even knowing it is there. Here the money could be used to sue for the main policy's excess amount, damages for any injury you have suffered or the cost of hiring a replacement car. "At least half the motorists in the UK have got this kind of cover," says Mr Asplin.

Insurers got their fingers burnt when they first introduced this cover to the UK in the mid-1970s. Then they found the only people who bought the stand-alone policies were those who knew they had a claim just around the corner. Now the cover is sold only as as an add-on to mass-market policies. This gives insurers thousands of policyholders who never claim for every one that does.

Dr Furedi fears that the introduction of conditional fees will lead to lawyers here adopting the excessive practices of American law. But we still have some way to go.

In a New York bar several years ago, I picked up a promotional matchbook from a local law firm called Kresch & Kresch. This read: "1-800 LAWSUIT. Accident and injury cases only. Free consultation. No fee unless you win. If you or a loved one have been seriously injured through someone else's fault you may be entitled to $$".

Suggested Topics
Arts and Entertainment
books
News
Dr Alice Roberts in front of a
people
Voices
Nigel Farage arrives for a hustings event at The Oddfellows Hall in Ramsgate on Tuesday
voicesA defection that shows who has the most to fear from the rise of Ukip
Arts and Entertainment
The Doctor and the Dalek meet
tvReview: Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Life and Style
ebooksA superb mix of recipes serving up the freshest of local produce in a delicious range of styles
Life and Style
ebooksFrom the lifespan of a slug to the distance to the Sun: answers to 500 questions from readers
Sport
Diego Costa
footballEverton 3 Chelsea 6: Diego Costa double has manager purring
Arts and Entertainment
The 'three chords and the truth gal' performing at the Cornbury Music Festival, Oxford, earlier this summer
music... so how did she become country music's hottest new star?
Life and Style
The spy mistress-general: A lecturer in nutritional therapy in her modern life, Heather Rosa favours a Byzantine look topped off with a squid and a schooner
fashionEurope's biggest steampunk convention heads to Lincoln
Voices
Caustic she may be, but Joan Rivers is a feminist hero, whether she likes it or not
voicesShe's an inspiration, whether she likes it or not, says Ellen E Jones
News
i100
Arts and Entertainment
Star turns: Montacute House
tv
News
i100Steve Carell selling chicken, Tina Fey selling saving accounts and Steve Colbert selling, um...
Arts and Entertainment
Unsettling perspective: Iraq gave Turner a subject and a voice (stock photo)
booksBrian Turner's new book goes back to the bloody battles he fought in Iraq
News
i100
Arts and Entertainment
Some of the key words and phrases to remember
booksA user's guide to weasel words
Life and Style
Brave step: A live collection from Alexander McQueen whose internet show crashed because of high demand
fashionAs the collections start, Alexander Fury finds video and the internet are proving more attractive
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs General

    IT Teacher

    £22000 - £33000 per annum: Randstad Education Leeds: ICT TeacherLeedsRandstad ...

    Graduate C#.NET Developer (TDD, ASP.NET, SQL)

    Negotiable: Harrington Starr: Graduate C#.NET Developer (TDD, ASP.NET, SQL) Su...

    Junior SQL DBA (SQL Server 2012, T-SQL, SSIS) London - Finance

    £30000 - £33000 per annum + Benefits + Bonus: Harrington Starr: Junior SQL DBA...

    C# Web Developer (ASP.NET, JavaScript, MVC-4, HTML5) London

    £35000 - £45000 per annum + Benefits + Bonus: Harrington Starr: C# Web Develop...

    Day In a Page

    The other Mugabe who is lining up for the Zimbabwean presidency

    The other Mugabe who is lining up for the Zimbabwean presidency

    Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
    The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

    The model for a gadget launch

    Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
    Alice Roberts: She's done pretty well, for a boffin without a beard

    She's done pretty well, for a boffin without a beard

    Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
    Get well soon, Joan Rivers - an inspiration, whether she likes it or not

    Get well soon, Joan Rivers

    She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
    Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

    A fresh take on an old foe

    Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
    Fashion walks away from the celebrity runway show

    Fashion walks away from the celebrity runway show

    As the collections start, fashion editor Alexander Fury finds video and the internet are proving more attractive
    Meet the stars of TV's Wolf Hall... and it's not the cast of the Tudor trilogy

    Meet the stars of TV's Wolf Hall...

    ... and it's not the cast of the Tudor trilogy
    Weekend at the Asylum: Europe's biggest steampunk convention heads to Lincoln

    Europe's biggest steampunk convention

    Jake Wallis Simons discovers how Victorian ray guns and the martial art of biscuit dunking are precisely what the 21st century needs
    Don't swallow the tripe – a user's guide to weasel words

    Don't swallow the tripe – a user's guide to weasel words

    Lying is dangerous and unnecessary. A new book explains the strategies needed to avoid it. John Rentoul on the art of 'uncommunication'
    Daddy, who was Richard Attenborough? Was the beloved thespian the last of the cross-generation stars?

    Daddy, who was Richard Attenborough?

    The atomisation of culture means that few of those we regard as stars are universally loved any more, says DJ Taylor
    She's dark, sarcastic, and bashes life in Nowheresville ... so how did Kacey Musgraves become country music's hottest new star?

    Kacey Musgraves: Nashville's hottest new star

    The singer has two Grammys for her first album under her belt and her celebrity fans include Willie Nelson, Ryan Adams and Katy Perry
    American soldier-poet Brian Turner reveals the enduring turmoil that inspired his memoir

    Soldier-poet Brian Turner on his new memoir

    James Kidd meets the prize-winning writer, whose new memoir takes him back to the bloody battles he fought in Iraq
    Aston Villa vs Hull match preview: Villa were not surprised that Ron Vlaar was a World Cup star

    Villa were not surprised that Vlaar was a World Cup star

    Andi Weimann reveals just how good his Dutch teammate really is
    Bill Granger recipes: Our chef ekes out his holiday in Italy with divine, simple salads

    Bill Granger's simple Italian salads

    Our chef presents his own version of Italian dishes, taking in the flavours and produce that inspired him while he was in the country
    The Last Word: Tumbleweed through deserted stands and suites at Wembley

    The Last Word: Tumbleweed through deserted stands and suites at Wembley

    If supporters begin to close bank accounts, switch broadband suppliers or shun satellite sales, their voices will be heard. It’s time for revolution