Solicitor fees — what is actually deducted
from your compensation.
The 25% figure is widely quoted in personal injury claims. It is often presented as the total cost of using a solicitor. It is not the full picture. This page explains what the 25% applies to, what else may be deducted, and the difference between what a claim is worth and what you receive.
A claim can settle at one figure. The amount paid to the claimant may be lower. The gap between those two numbers is made up of the success fee, possible ATE insurance, and any disbursements not recovered from the other side. These are separate elements — and they are not always explained clearly at the start of a claim.
Understanding how each element works makes it easier to interpret a settlement figure and assess what a conditional fee agreement actually means in practice.
The success fee — what the 25% applies to
The 25% is a cap, not an automatic charge. Understanding what it is applied to — and what it is not — changes the picture significantly.
Under a Conditional Fee Agreement (no win, no fee), a solicitor charges a success fee if the claim succeeds. This fee is deducted from the compensation before it is paid to the claimant. It reflects the risk the solicitor takes in running the claim — if the claim fails, the solicitor is not paid for their time.
The cap on the success fee is 25%. This is a legal maximum, not a standard negotiated figure. In practice, many firms apply the full percentage.
The success fee cap applies only to specific parts of the compensation. It applies to: compensation for pain, suffering and loss of amenity (the injury payment) and past financial losses — for example, travel costs or earnings already lost at the time of settlement.
It does not apply to future losses — for example, future loss of earnings or future care costs. This distinction is built into the law but is not always explained at the point a claimant signs a conditional fee agreement.
Is the 25% fixed — or can it be lower?
The 25% is the legal maximum — not an automatic charge. A solicitor can agree a lower percentage. The percentage that applies to your claim is whatever is stated in the conditional fee agreement before you sign it.
In practice, most firms apply the full 25%. When LASPO introduced the cap in 2013, the expectation was that competition between firms would drive fees below the maximum. That has not happened consistently.
The agreed percentage must be set out clearly in the conditional fee agreement before you sign. You are entitled to ask whether the percentage can be lower — particularly for straightforward claims where liability is not disputed. Whether a firm will negotiate depends on the firm.
Once the agreement is signed, the stated percentage governs what can be deducted. It is worth reading that figure before committing.
For a straightforward OIC whiplash claim settling at the government tariff — for example, £1,510 for a 9–12 month injury — a 25% success fee would represent a deduction of approximately £378. The claimant would receive approximately £1,132.
The tariff value is fixed by the government and is the same whether the claim is handled with or without a solicitor. The success fee does not change what the claim is worth. It reduces what the claimant receives from it.
After the Event insurance
ATE insurance is a separate cost that may or may not apply depending on how the claim is funded. It is often not explained clearly alongside the success fee.
After the Event (ATE) insurance is a policy taken out after an accident to cover the risk of paying the other side's legal costs if the claim fails. The premium is deferred — it is typically only payable if the claim succeeds, at which point it is deducted from the compensation.
ATE insurance is not required in every claim. In straightforward OIC claims where liability is admitted, the practical risk of needing it is lower. Whether a policy is taken out — and what the premium is — depends on the firm and the circumstances of the claim.
The ATE premium is a deduction from compensation on top of the success fee. In some claims it is modest. In others it can be significant. Because it is not subject to the same 25% cap as the success fee, it can add materially to the total amount deducted.
A claimant who understands only the success fee figure may not be aware that an ATE premium will also be deducted. This is one of the most common sources of confusion at the point of settlement.
Disbursements
Disbursements are the costs of running the claim. Some are recovered from the other side. Others may not be.
Disbursements are third-party costs incurred in managing the claim. Common examples include: medical report fees, court fees if proceedings are issued, and expert fees in more complex claims.
In OIC claims, legal costs cannot be recovered from the defendant's insurer — both parties bear their own costs. This means disbursements that are not recovered from the other side are typically covered either by the conditional fee agreement or deducted from the settlement.
In a straightforward OIC claim, disbursements are often modest — the main cost is the medical report fee. What matters is understanding whether these costs are covered within the agreement, or whether they will be deducted from your compensation in addition to the success fee.
The conditional fee agreement should set out how disbursements are handled. This is worth checking before signing.
What you receive vs what the claim is worth
These are two separate figures. Understanding the difference between them is the key to interpreting any settlement.
The value of a claim is assessed independently of how it is funded. Deductions affect what the claimant receives — not what the claim is worth. A settlement figure represents the injury and financial losses. The amount paid to the claimant may be lower once the success fee, any ATE premium and unrecovered disbursements are applied.
The solicitor does not reduce what the claim is worth — only what is paid to the claimant after deductions.
A whiplash claim with a 9–12 month prognosis settles at the tariff figure of £1,510, plus £400 in agreed financial losses — a total settlement of £1,910.
If the success fee is lower than 25%, the deduction is proportionally smaller. If the claimant has legal expenses insurance, the solicitor's fees are paid by the insurer — not from the compensation — and the claimant receives the full settlement amount.
Checking for legal expenses insurance before instructing a solicitor on a no win, no fee basis is worth doing. It is frequently included in car insurance, home insurance and some bank account and union memberships. If it applies, it changes the financial equation significantly.
Why the system is structured this way
The fee structure is not incidental. It reflects structural features of how personal injury claims are funded in England and Wales.
The OIC portal was introduced in 2021 as part of a package of reforms to reduce the cost of low-value road traffic accident claims. As part of that reform, the costs a solicitor can recover from the defendant's insurer were capped at a fixed level — significantly below what solicitors had previously been able to recover.
This changed the economics of running these claims. Because the solicitor cannot recover the full cost of their work from the other side, the success fee deducted from the claimant's compensation is part of how the model remains financially viable for firms handling large volumes of cases.
For how the OIC process works and what the reform changed: OIC portal explained →
The 25% cap is a legal limit — not a required figure. A solicitor can charge less. Whether a lower percentage is offered depends on the firm. Most apply the full cap.
A conditional fee agreement must set out the success fee percentage before the claimant signs. You are entitled to ask for time to read it and to ask questions about any part of it before agreeing to it.
What to check before signing anything
A conditional fee agreement is a binding document. What it says governs what can be deducted. These are the key things to look for.
You are not required to sign on the spot. You are entitled to read it. If a firm makes you feel pressured to sign immediately, that is worth noting.
The agreement must state the success fee percentage clearly. It should specify what it is applied to — the injury payment, past losses, or both. If the percentage is the maximum 25%, it is worth asking whether that figure is fixed or whether it can be reduced.
If ATE insurance is being taken out on your behalf, this should be stated in the agreement or client care letter. The agreement should explain when the premium becomes payable and how much it is — or how it will be calculated. If it is described as deferred to settlement, establish what the likely amount is before agreeing to it.
The agreement should set out which disbursements are covered and which — if not recovered from the other side — may be deducted from your compensation. Medical report fees are the most common. In an OIC claim where liability is admitted and proceedings are not issued, court fees should not arise.
Before instructing any solicitor on a no win, no fee basis, check whether you already have legal expenses insurance. It is included in many car insurance, home insurance, bank account and trade union packages. If it applies, it pays the solicitor's fees — nothing is deducted from your compensation.
The claim value and what you receive are separate figures.
Understanding what reduces the second one — and by how much — is the starting point for assessing any conditional fee agreement clearly.
Deciding whether to use a solicitor?
The fee structure is one part of the decision. The other is whether a solicitor changes the outcome for your specific claim. The OIC's own data on this is worth reading before deciding.
Last reviewed: 24 March 2026
ClaimTalk provides general guidance only. Not legal advice. Not affiliated with the Official Injury Claim portal or any government body.
ClaimTalk cannot respond to questions about individual claims. If you need advice specific to your situation, a regulated solicitor is the appropriate route. You can verify a solicitor is authorised at sra.org.uk.