Understanding success fees and deductions from compensation

Updated: 17 Oct, 2025
By Chris Salmon

If you make a personal injury claim on a No Win, No Fee basis, your solicitor will usually be paid through a success fee. It is important to understand how these fees and other deductions work so that you know exactly how much compensation you will take home.

At a glance

  • Success fees are capped at 25% of your compensation.
  • Other deductions may include After the Event (ATE) insurance costs.
  • You will always agree fees with your solicitor before you sign a Conditional Fee Agreement.
  • You should receive a clear breakdown of all deductions before accepting a settlement.

What is a success fee?

A success fee is the payment your solicitor receives if your claim is successful. It is a percentage of your compensation and is set out in the Conditional Fee Agreement (CFA) that you sign at the start of your claim.

The Ministry of Justice caps success fees at a maximum of 25% of your compensation for personal injury claims. This limit is designed to protect claimants and ensure you still receive the majority of your award.

Before you sign a no win, no fee agreement, ask how the success fee is worked out, whether it is capped, and what other costs might be deducted. Knowing this upfront helps you keep more of your compensation.

John Kushnick

Legal Operations Director
National Accident Law

Other possible deductions

  • ATE insurance premium: Most No Win, No Fee claims include an After the Event (ATE) insurance policy to cover legal costs if you lose. The cost of this policy is deducted from your compensation if your claim succeeds.
  • Shortfall in legal costs: In some cases, the defendant may not pay all your legal fees. If there is a shortfall, your solicitor may deduct the balance from your award, but this must be agreed with you in advance.
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Real-world example

A warehouse worker successfully claimed £40,000 in compensation after a serious back injury. Under his CFA, his solicitor deducted a 25% success fee (£10,000) and the cost of the ATE policy (£800). The worker took home £29,200. He received a full breakdown of deductions before accepting the settlement.

How solicitors must explain deductions

Your solicitor is legally required to explain:

  • How success fees are calculated.
  • What other deductions may apply.
  • The maximum percentage that could be taken from your compensation.

Always ask your solicitor for a written breakdown of potential costs before you sign a CFA.

Can deductions ever exceed 25%?

The 25% cap only applies to the success fee. Additional deductions such as ATE insurance premiums are separate. This means the total amount deducted from your compensation can sometimes exceed 25%. Clear communication with your solicitor is essential so there are no surprises.

Next steps

If you are concerned about deductions, speak to your solicitor before you start your claim. Ask for written confirmation of all possible costs. This way you can make an informed decision and understand exactly what you will receive if your claim succeeds.

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About the author

Chris Salmon is a legal commentator and co-founder of Quittance Legal Services. He has written extensively about workplace accidents, employment rights and the claims process. Chris's work has been cited in national media and he regularly contributes practical guidance to help injured workers understand their options.

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Last reviewed October 2025 by Chris Salmon