What is a No Win No Fee agreement?
A no win no fee agreement – often referred to as a conditional fee agreement (CFA) – is a written agreement between you and your solicitor which allows you to bring a personal injury compensation claim without having to pay you solicitor anything if you lose your case.
Once your solicitor has agreed to take your case on a no win no fee basis, there will be no upfront costs that you are required to pay and you only have to pay your solicitor anything if your case is successful and you are awarded compensation.
How much do I have to pay my solicitor if I win my case?
No win no fee agreements are regulated by the Courts and Legal Services Act 1990 (as amended by the Legal Aid, Sentencing and Punishment of Offenders Act 2012). This provides that solicitors are allowed to charge a ‘success fee’ from their compensation claim client if they win their case.
There is a cap on the amount of success fee that a solicitor is allowed to charge which is set by the Lord Chancellor. This cap is currently set at 25 per cent of your final compensation package. This means if you are awarded £2,000 in compensation, the law firm representing you would keep £500 (25 percent).
Your solicitor cannot charge you more than 25 percent of the compensation you are awarded for your injury. Most will charge you 25 percent, but some charge less. You will agree the amount of the success fee your solicitor will take before they start your case. They will ensure that you understand everything involved in the process and answer any questions you have before you sign the no win no fee agreement.
There may be some costs you will have to pay your solicitor back for when your case is successfully concluded. This would include things like expert medical reports, barristers’ fees and court fees.
If you are not already insured for legal costs (many people are already covered as part of their motor or house insurance policy), you will usually be required to take out after the event (ATE) legal expense insurance to cover any such costs and to allow your solicitor to provide the no-win no-fee service.
Your solicitor will arrange this policy for you. If you do take out an ATE insurance policy, you won’t have to pay for it upfront and you only pay the premium for it if your claim is successful.
ATE insurance will also cover the legal fees and costs you would need to pay if your case is abandoned part way through your claim. This could happen, for example, if it becomes clear following expert evidence that your case is not as strong as was initially thought.
Put simply, if you lose your case there is generally nothing that you have to pay. The risk is transferred from you to the solicitor when you sign the no win no fee agreement, which is why solicitors will only take your case on this basis if your case has a good chance of success.
In exceptional circumstances, you may be ordered by the court to pay the other party’s legal expenses. This will usually only arise, however, if the court feels your case was dishonest or fraudulent – as long as you are completely honest with your solicitor though, you have nothing to fear.
Similarly, you may be required to pay a termination fee to your solicitor if your case doesn’t proceed because you don’t fully cooperate with your legal representative. This could arise if you deliberately lied to your solicitor, if you don’t turn up at a court hearing, or if you failed to go to your expert medical examination.
The termination fee will be based on the amount of time your solicitor has already spent on your claim, but again, you don’t need to worry about this as long as you tell your solicitor the truth and do what she or he asks you to do.
Why were no win no fee agreements introduced?
CFAs were introduced in 1998 after a government review found that many people who had a valid claim for compensation simply could not afford to do so.
Allowing people who have suffered a personal injury through someone else’s negligence to bring a case on a no win no fee basis means that more people were able to obtain access to justice and secure expert legal representation without any risk of losing out financially if they lost the case.
Why can’t I claim my legal costs from the other side if I win my case?
Prior to 2013, parties were allowed to recover the success fee and their legal expenses from their unsuccessful opponent. This allowed the law firm representing you to pay you 100 per cent of your compensation.
However, s 44 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, changed the recoverability of success fees, which means they are no longer recoverable from the opponent and must now be paid by the successful clients, apart from in exceptional cases.
What sort of claims can be brought on a no win no fee basis?
Most personal injury compensation cases can be brought on a no win no fee basis, with some of the most common ones including: