Some Solicitors charge VAT on top of 25% success fee deduction – is this legal?
It seems a handful of personal injury solicitors firms are charging their clients VAT on top of the 25% success fee, therefore increasing the success fee to 30%.
This is illegal. The Explanatory Note to The Conditional Fee Agreements Order 2013 states any success fee must be inclusive of VAT.
If your solicitor charged you VAT on top of the success fee then this writer’s view is that you are entitled to not only that extra 5% back but there is an argument you would actually be entitled to the other 25% back as the agreement would have been unlawful, and unlawful agreements are not legally enforceable.
In personal injury cases the 25% success fee must include VAT and any barrister’s success fees as well, so the maximum a client can be charged is 25% of their compensation.
If you have any queries about this please feel free to contact us on 0161 447 9191 or email@example.com.