An introduction to No Win No Fee
Even those who have very little experienceof the justice system are likely to have heard of ‘no win, no fee’ arrangements. It’s a simple phrase and seemingly explains itself: if a legal claim is unsuccessful, the claimant will not have to pay their solicitor’s fees. But do you really know what such an arrangement entails?
The no win, no fee system – sometimes known as Conditional Fee Agreements (CFAs) – was introduced in 1995 to replace Legal Aid, with the intention of helping people who otherwise could not afford to pay for expensive legal representation.
For lawyers, this arrangement provides a strong incentive to concentrate their legal efforts only on cases that they believe have a good chance of being successful and securing the best possible outcome for a claimant.
Typical no win, no fee arrangements are used for a range of civil litigation cases, such as vehicle accident injuries, workplace accidents, in cases of medical negligence or after the purchase of defective products.
In the past, this meant that there were no upfront legal fees or costs to pay if your case was lost. If the case was won, all damages were awarded to claimants, while the losing side was required to pay the claimant’s legal costs, along with a lawyer’s ‘success fee’.
Changes to the system
On 1 April 2013 the arrangements for no-win, no-fee cases were reformed. Now, the ‘success fee’ is no longer payable by the losing side. Instead, this success fee must be paid by the winning party, typically out of the damages recovered.
Although this success fee can be up to 100 per cent of the basic fee in personal injury cases, a lawyer’s fee must not exceed 25 per cent of the damages, excluding future care and loss.
While you do not have to pay legal fees if your case is not successful, other costs, called disbursements, to include court costs or expert’s charges are covered by insurance that may be taken out on your behalf , unless you have a policy of your own to cover such fees.
If you have legal expenses cover (such as with a bank account, credit card or car or home insurance policy), then your insurance could cover your costs.
What happens in a no win, no fee case?
Once a lawyer or claims advisor has collected all the details of your case, they will inform you whether your case is likely to be successful. From there, an agreement will be drawn up that explains what will happen in the event of a win or a loss and what fees you agree to pay.
Your lawyer will then help progress the case and negotiate what compensation should be paid with the defendant. In order to avoid the costs of an expensive legal battle, most will choose to settle out of court.
If either party chooses not to settle, the case will be taken to court, where you (and potentially others) will be required to give evidence. However, if you go to court and are unsuccessful, you are also likely to lose any previous offers of compensation made before the trial.