Self-help guide
Before you start thinking about your funding options, we strongly suggest that you read our self-help guide on Understanding legal costs — the principles. If you have not yet found a solicitor to act for you, we also recommend checking our guide on How to approach a lawyer for the first time.
You should feel free to ask your solicitor about each of the options available. It may also be worth shopping around to see if another solicitor will offer you a more favourable arrangement, particularly about terms of the conditional fee agreement (CFA) — more information on this is provided below.
Before-the-event insurance (BTE)
If you have decided to take legal advice, you should always check your insurance policies to see if you have legal expense insurance (LEI) cover. The details will be contained within the policy — some household and car insurance policies include LEI cover as an incidental benefit of the policy without you being aware of it. If you discover you do have LEI, then make sure it covers clinical negligence claims — it could save you money if it does.
BTE insurance policies vary — some are more generous than others, offering up to £20,000 (or sometimes even more). If you have the benefit of legal expenses cover, it may cover the cost of some or all your disbursements, as well as some or all of the legal costs of investigating your claim.
However, a potential problem with BTE cover is that insurers often only cover you to see a lawyer who is on their panel. It is quite common for insurers to put together a panel of lawyers based not on their expertise and skill in this area of work, but rather their hourly rate. If you are appointed a solicitor by your insurer, you should ask whether they are accredited in clinical negligence work.
If your BTE insurer says they will not fund the solicitor of your choice and that you have to use one of their panel firms, seek advice from your preferred solicitors, as they may be able to persuade the insurer to change their mind.
If you are member of a trade union, it is worth checking the terms of your membership as you may be covered for legal advice.
BTE insurance is not as common as it once was, but it is still worth checking your policies and/or memberships. If there is legal expenses cover, you should check the policy terms in relation to time limits for making a claim to the insurers. If there is a time limit, you should submit details to the insurers within this period to avoid a refusal of cover at a later stage. If the period for making a claim is not clear, you should speak to the insurance provider.
Legal aid
It may be that you qualify for legal aid to investigate and pursue your potential clinical negligence claim. In Scotland, legal aid remains available for all types of clinical negligence cases, but will only be granted if you are able to show that your claim appears to have reasonable prospects of success and that you satisfy the legal aid financial means test.
As a result of the means test, many do not qualify financially (particularly as parents’ resources are taken into consideration when applying for children). Not all firms will offer legal aid (preferring the ‘no win, no fee’ approach), so it might be difficult to get legal aid. However, an Avma-approved Scottish clinical negligence solicitor who has signed the Avma Code of Conduct should be able to explain when legal aid might be the best option for you.
If you do obtain legal aid and your case is run using this method of funding, you do not pay a success fee out of your damages. However, the Scottish Legal Aid Board (SLAB) might require an initial financial contribution from you, and there can also be claw-back (from any award) at the conclusion of the case.
If you can obtain legal aid, it can be difficult for lawyers to run your case because the SLAB has restricted the amount of money your lawyer can spend on expert’s fees. In practice, the fees are so low that many medico-legal experts will not undertake work at legal aid rates. Given the importance of the expert’s opinion and the fact that your claim will largely stand or fall based on the strength and quality of it, this is a significant factor. You also need to bear in mind that the NHS hospital trust (or private hospital) involved in the claim is unlikely to be faced with the same restrictions on funding.
Please carefully read the information on conditional fee agreements (CFA) and after-the-event (ATE) insurance policies below. You will note that if you do opt for a CFA arrangement instead of legal aid, the solicitor is entitled to ask for a success fee which is payable out of the award of damages, although the success fee is tapered and capped to ensure you still receive the majority (at least 80%, but often more) of any award.
The ATE policy can also be deducted from damages, although some firms will meet this cost for you, so you should shop around. It is important to weigh any success fee against the benefit of having access and freedom to choose the very best available medical experts, because without succeeding the value becomes irrelevant and the best experts may increase the value of your claim.
Paying privately
For many years, this was the usual way lawyers were paid. This method of funding means the solicitor charges an hourly rate for the work undertaken on your behalf. Usually, the lawyer will give an overall best estimate of the total likely costs to carry out the work, but will break this down by setting out what work will be done initially and give you a cost estimate for that bit of work. You will be expected to pay money to the solicitor first, before any work starts. This is known as money on account of costs.
If you pay for the work privately, you will be responsible for the solicitor’s costs whether you win or lose your claim. If your claim is successful, you will be able to recover the reasonable costs from the losing party. This is dealt with in our guide to the principles of understanding legal costs.
Solicitors’ hourly rates will vary from one firm to the next. The hourly rate will reflect where the practice is located (for example, a solicitor’s firm based in the centre of Edinburgh is likely to charge a higher hourly rate than a firm elsewhere). The rate may also be influenced by how experienced the solicitor is. Solicitors are allowed to set their own hourly rate. Although the court may offer some guidance on what is considered reasonable, this is not binding.
Clients are not usually asked to fund the entire case privately. However, you may still be asked to pay privately to fund the initial investigation stage of your claim, especially if the chances of succeeding are unclear. Once a solicitor has decided they will take the case on, they will usually invite you to enter into a CFA with them — see below for more information.
Conditional fee agreements (CFA) and success fee agreements (SFA)
This is the most common way of funding a clinical negligence claim. However, a solicitor is not obliged to enter into this type of agreement with you. See our guide on how to approach a lawyer for the first time for more information.
There is no guarantee that your solicitor will take your case on a CFA/SFA — instead, they will consider the merits of the case and the prospects of the claim succeeding. They also want to know that the costs of bringing the claim are going to be proportionate to the amount of money likely to be recovered.
You may be asked to start by taking some initial steps — such as lodging a formal written complaint in respect of the care — to enable the solicitor to identify the prospects of the case succeeding, or to pay a restricted cost for some initial investigations such as obtaining a preliminary expert report. Once the initial investigations are complete, you can expect the lawyer to decide whether they are prepared to work on a CFA/SFA basis going forward. Most of the time, they will be able to assess whether they are prepared to act for you on that basis from the outset without asking you to incur any expense.
How does a CFA and SFA work?
CFA is often referred to as a ‘no win, no fee‘ arrangement, but this can be extremely misleading. A CFA works on the basis that the parties enter a contract. Like any contract, there are terms and conditions that need to be observed, so it is important that you read your CFA carefully.
When acting on this basis, it is likely you will be issued with a separate success fee agreement (SFA), which is again a contract and should be read carefully. The success fee and SFA (to reflect the risks and costs involved in complex claims of this nature) will set out the maximum deduction from any award.
In Scotland, the success fee is tapered and capped so that you will receive at least 80% of any award/damages for claims up to £100,000 — and an even greater percentage for claims above that level, with the percentage dropping to 10% from £100,000 to £500,00, then 2.5% from over £500,000.
In order to enter a SFA with you, the instructed lawyer/firm must agree to fund the cost of your claim, which can be very expensive, and should also put in place ATE insurance to ensure you are protected. The cost of ATE can also be deducted from your damages, but some firms will meet this cost for you. Detailed guidance can be found on the Law Society of Scotland’s website.
After-the-event (ATE) insurance
If you have signed a CFA, it is very likely that your solicitor will recommend you take out ATE insurance as well. As the name suggests, ATE insurance is taken out after the clinical negligence has occurred.
ATE insurance will cover the cost of expert reports, which can be expensive — generally, ATE insurance is the most effective way of covering the cost of these reports. The premium is only payable in the event of success and is not recoverable from the other side, even if you win your claim. It is acceptable to deduct the premium from your damages in addition to the success fee, but some firms will offer to meet the cost of the premium for you.
Qualified one-way cost shifting (QOCS) has now been introduced for personal injury (including clinical negligence) claims which protects you from paying the opposing party’s costs even if they lose. For more information on QOCS, please refer to our leaflet Understanding legal costs — the principles.
Do I need ATE insurance?
The introduction of QOCS means that it is no longer necessary for potential claimants to take out insurance to cover the risk that they may lose and end up having to pay the winning party’s costs. However, generally you are well advised to take out ATE insurance to cover the cost of your own liability and causation expert fees, as well as protecting you from any adverse costs orders made against you or any cost penalties you may incur as a result of failing to beat a tender. See our guide on settling a claim for more information.