If you have been injured because of someone else's negligence, you may be entitled to claim compensation for your losses. However, making a personal injury claim can be a complex and daunting process, especially if you are not familiar with the legal system. That's why it's important to get professional advice from a solicitor who specialises in personal injury law.
In this blog post, we will answer some of the most frequently asked questions about personal injury claims in the UK, such as:
- Can I claim for an accident after 10 years?
- Can I claim for an accident after 4 years?
- Is a personal injury claim classed as income?
- What happens if I lose my personal injury claim?
- How much do personal injury solicitors charge?
- Do you have to declare compensation to HMRC?
Can I Claim for an Accident After 10 years?
The general rule is that an injured party has three years from the date of knowledge of their injury to start legal action against the responsible party. This is known as the limitation period. The date of knowledge is the date that an injured party was aware, or should have become aware, of an injury suffered because of an identifiable defendant’s acts or omissions.
The date of knowledge will often be the same date that an accident causing the injury occurred, however, this this is not always the case. An injury or illness may occur over a period of time. The injured party may not become aware of the link between their condition and the exposure causing the injury or illness until some time later. For example, injuries or illnesses arising from exposure to a harmful substance or environment, such as asbestos or radiation.
There are other situations where the date of knowledge will differ. For example:
- If the injured party was under 18 at the time of their accident, the date of knowledge begins on their eighteenth birthday. This means they will have three years from their 18th birthday to bring a claim to the Court.
- If the injured party lacked mental capacity at the time they were injured, the limitation begins once they gain mental capacity after the accident.
If the injury or illness occurred abroad, the limitation period may vary depending on the laws of that country.
If you are unsure whether you can still make a claim after 10 years, you should consult a solicitor as soon as possible to avoid missing the deadline.
Can I Claim for an Accident After 4 years?
The general rules on bringing a claim within the limitation period are explained above.
If an injured party wanted to claim for an accident after 4 years but they are concerned this is outside the limitation period, the injured party may need to show that certain circumstances apply to their case. For example:
- The injured party did not realise that they had suffered an injury until later, such as a latent disease or a psychological trauma.
- The injured party did not know who was responsible for their injury until later, such as in a hit-and-run accident or a medical negligence case.
- The injured party was prevented from making a claim by fraud, mistake, or concealment by the defendant or their insurer.
- The injured party was unrepresented and were in negotiations with the defendant or their insurer and they led the injured party to believe that they would settle their claim without going to court.
However, these arguments are not easy to prove and may be challenged by the defendant. Therefore, it is advisable to seek legal advice from a solicitor before making a claim if you think it may be outside the limitation period.
Is a Personal Injury Claim Classed as Income?
No, a personal injury claim is not classed as income for tax purposes. This means that you do not have to pay income tax on any compensation that you receive for your pain and suffering, medical expenses, loss of earnings, care costs, or any other losses arising from your injury.
However, there are some exceptions to this rule, such as:
- If you receive interest on your compensation award, you may have to pay tax on the interest amount.
- If you invest your compensation award and receive income from it, such as dividends or rent, you may have to pay tax on that income.
- If you receive compensation for loss of pension rights, you may have to pay tax on that part of your award.
- If an injured party receives social security benefits from the state because of injuries suffered in an accident, such as Universal Credit, Employment and Support Allowance, or the care component of Disability Living allowance, the defendant may have to repay some or all of those benefits directly to the Compensation Recovery Unit (“CRU”). If the injured party suffered loss of earnings and/or received unpaid care from family or friends because of injuries suffered in an accident, the injured party can make a claim for these losses from the defendant in their personal injury claim. Any claim for loss of earnings or unpaid care may need to be offset against state benefits received from the same need. This is because an injured party cannot be compensated twice for the same type of loss.
The defendant must notify the CRU of a personal injury claim and the CRU will send the parties' representatives a certificate indicating if there are any potential relevant deductible benefits. Howells will inform and advise their clients should this be of relevance to their claim.
It's important to keep records of how your compensation award is calculated and how you spend or invest it. You may also want to consult an accountant or a financial adviser to help you manage your finances after receiving compensation.
If an injury party receives means tested benefits, Howells can also advise on the setting up of a Personal Injury Trust Fund. Means tested benefits can be reduced or stopped if the eligibility criteria for those benefits are not met. If an injured party receives and places compensation in a Personal Injury Trust Fund it will not impact an injured party’s eligibility to receive means tested benefits as it will be classed as disregarded capital.
What Happens if I Lose My Personal Injury Claim?
A Conditional Fee Agreement (“CFA”) is a contract between the injured party and their solicitor that states that you will only pay their fees if you win your case. If the injured party enters in to a CFA with a solicitor but loses their personal injury claim, meaning that the court decides that the defendant is not liable, the injured party will not pay their solicitors fees.
If the injured party’s claim is successful, the defendant will pay the injured party’s costs.
Under a CFA, the injured party’s solicitor will also deduct a success fee from the injured party’s compensation. The success fee does vary but it is capped at a maximum of 25% of the injured party’s compensation.
An After the Event Legal Expenses Insurance policy may be required in addition to a CFA. A CFA does not cover the disbursements that are incurred in a claim such as medical expert fees and court fees. This policy will protect the injured party from paying disbursements that have been incurred if the claim is unsuccessful. If the claim is successful a premium is paid from the injured party’s compensation to the insurer of the policy.
Therefore, it is important to understand the risks and benefits of making a personal injury claim before you start legal action. You should also discuss with your solicitor the options and costs of funding your claim and protecting yourself against the risk of losing.
How Much do Personal Injury Solicitors Charge?
The amount that personal injury solicitors charge for their services will vary from firm to firm. A case handler charges a hourly rate. Key factors that can determine the hourly rate charged include the number of years experience of the individual file handler and whether or not the file handler is qualified or not.
However, as mentioned above, if an injured party’s claim is funded by a CFA, the injured party will not pay the solicitors costs in a personal injury claim if the case is unsuccessful. If the claim is successful, the defendant will pay the injured party’s costs.
If the claim settles for under £25,000, is not allocated to the court multi-track, and is not a small claim, the injured party’s costs will usually be fixed in accordance with the fixed recoverable costs regime.
If a claim falls within the small claims threshold, the injured party will not usually recover their solicitor’s costs from the defendant, save for in an exceptional circumstances such as where the injured party had a reasonable belief that the claim would exceed the small claims threshold. A damages-based agreement (DBA) allows for a client to pay a solicitor their fees based on a percentage of the damages that they recover.
Another type of funding agreement is a private fee-paying agreement. This agreement means that the client will pay their solicitor's fees regardless of whether they win or lose their case. The amount that the client pays will depend on the hourly rate of the solicitor and the time that they spend on your case. The client may also have to pay for disbursements, unless they have a separate legal expenses insurance policy in place.
It's important to consider the different options of funding your claim and to choose the one that suits your needs and budget. You should also ask your solicitor for a clear estimate of their fees and expenses before you instruct them.
Do You Have to Declare Compensation to HMRC?
Usually not, However, there are some situations where you may have to declare compensation to HMRC, such as:
- If you receive interest on your compensation award, you may have to declare it as income and pay tax on it.
- If you invest your compensation award and receive income from it, such as dividends or rent, you may have to declare it as income and pay tax on it.
- If you receive compensation for loss of pension rights, you may have to declare it as income and pay tax on it.
Therefore, it is important to keep records of how your compensation award is calculated and how you spend or invest it. You may also want to consult an accountant or a financial adviser to help you manage your finances after receiving compensation. If you have any specific questions relating to a potential personal injury claim or a medical negligence claim please get in touch with our friendly, highly experienced legal team.
