How Does “No Win No Fee” Work?
“No win no fee” is a popular term used to describe the Conditional Fee Agreement (CFA) between you (the client) and a law firm. “No win no fee” is exercised by nearly all solicitors dealing in claims for commercial or personal injury. With this agreement a solicitor takes on a case knowing that if they lose the case, the client will not have to pay any costs to their solicitor. However the client does need to be aware that if they lose the case they may well be responsible for the defendant’s costs or fees.
If the case is won the losing party will specify an amount (award) for damages. The losing party (defendant) will also be required to pay the clients legal costs in full. The costs the defendant must pay if they lose includes the solicitors standard fee plus an additional “success fee” which in UK law cannot be more than 100% of their standard fee. With these rules in place, if the case is won there are no costs for the client to pay and they receive 100% of the compensation award.
Some solicitors purchase insurance to protect their client from having to pay costs to the defendant in a loss with insurance known as “After the Event Insurance” (ATE). ATE was created to protect the client from risk of legal costs from losing a case or the case being dropped or discontinued. ATE is usually taken out at the beginning of a “No win no fee” claim. If you’re planning on making a “no win no fee” claim you should be made aware by your solicitor if ATE insurance has been taken out or not. If you lose your case and your solicitor has not advised you of ATE insurance, there could be grounds for a potential claim against your solicitor for negligence.
Financial assistance funded by the government exists but normally only for extreme cases or any case involving medical/clinical negligence. This is called Legal Aid.
Before the Event Insurance (or BTE) covers you for any legal expenses in the event of needing to make a personal injury claim. Most people have BTE incorporated into their Car, Content, or Home insurance. It is a good idea to see whether or not your policies mention this cover by checking any insurance policy documentation and agreement papers you may have.
