No Win No Fee Explained
A common question asked of personal injury solicitors is “how do no-win-no-fee agreements work?” or often “will I be charged?”.
Hopefully this article will go some way to explaining how it all works.
Historically, the position always was that the client would pay regular bills, often monthly, for the solicitor’s services. These bills would have to be paid regardless of the outcome of the case. A lot of solicitors still work this way, particularly in contract or business disputes. The obvious problem with this system is that it becomes very risky, and difficult, for people on average or lower incomes to afford a solicitor.
In the 1990s the Government reviewed the system and recognised this issue and so “no-win-no-fee” agreements (or to use their official title “conditional fee agreements”) were proposed and then introduced.
When working under a no-win-no-fee agreement the solicitor does not send any monthly bills to his or her client and their bill only becomes payable if the case wins. If the case does not win the bill is cancelled and the file is closed. This system therefore shifts the financial risk of pursuing a case from the client to the solicitor, allowing people of lower incomes to access the legal system without personal financial risk to themselves.
In return for working on a no-win-no-fee basis the solicitor can charge a success fee which is essentially an extra fee (a percentage of your compensation) in recognition of taking the financial risk of the case upon themselves.
Wait – does this mean I will have to pay the full bill if my case wins?
No – in litigation the loser pays the winner’s costs. So if you win your case it is the other party that has to pay the solicitor’s bill. This remains true even if you only recover a very small amount, or if your compensation is reduced because of something you did wrong (this is called “contributory negligence”).
However, following pressure from insurance companies, the Government changed the rules in April 2013, to make things less favourable for injured people. Before April 2013 there were no deductions in personal injury claims so if you won £10,000 you received £10,000, but from April 2013 onwards success fees and the costs of any “after-the-event insurance” policies (see below) are payable by the client, if the case wins. If the case does not succeed both the success fee and after-the-event insurance premium are cancelled, ensuring the client has full no-win-no-fee protection.
What happens if I lose?
As it is “no-win-no-fee” if you lose the solicitor cancels their fees. For this reason working on a “no-win-no-fee” basis can be a risky business for solicitors as they do not get paid unless they win the case!
Your solicitor will discuss taking out an insurance policy to protect you in your claim from other potential expenses such as legal fees, medical report fees and so forth.
Since April 2013 there is now further protection for people who bring personal injury claims and lose. This is known as “qualified one-way costs shifting” and it basically means that defendants in personal injury claims cannot recover their costs from the claimant, even if the claimant loses
Your solicitor will consider the facts of the case and discuss your options with you to ensure you are appropriately protected – remember – that’s part of your solicitor’s duty to you!
No-win-no-fee agreements allow people to pursue legal claims, such as personal injury claims, without personal financial risk. Your solicitor will ensure you are fully protected when bringing a legal claim and as long as you are fully honest and co-operate with your solicitor throughout you should not be at risk of having to pay any legal costs in your claim.
Aston Knight Solicitors offer no-win-no-fee agreements for all personal injury, industrial disease and medical negligence claims.
If you would like to know more, or to discuss anything further, please feel free to contact us on 0161 447 9191 or email@example.com.