A No Win No Fee arrangement is the term for a Conditional Fee Agreement (CFA). In very simple terms, this is the contract between the solicitor and their client to charge their fees at the end of the case, depending on the outcome.
No win no fee arrangements were introduced to give those who couldn’t afford legal representation access to justice when they needed to make a compensation claim. Legal Aid is not available for personal injury cases.
The CFA ensures you don’t need to worry about paying for upfront legal fees and enables claimants of any economic background to take a matter to court without the risk of being charged solicitor fees if their claim is not successful. Put simply, your solicitor will take on your case; if you don’t win any compensation you will not need to pay any solicitor costs.
If the case is lost, then the client does not pay their solicitor’s fees. The solicitor acting for that client does not recover any fees for the time spent investigating a claim should it be unsuccessful. This can often amount to months or even years’ worth of work, and therefore thousands of pounds may be unrecoverable.
Originally, this meant No Win No Fee arrangements would ensure all legal costs, including the success fee, associated with making a claim were covered by the defending party. As well as not having to pay any costs, the Claimant would also keep 100% of their compensation if their case was successful.
However on 1st April 2013, new legislation (Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO)) was introduced which meant solicitors were no longer able to recover all of their fees from the defending party. In particular, the Solicitor was no longer able to recover the success fee from the defending party.
The situation since April 2013 is if your case is successful you will be required to contribute towards the cost of legal representation. These costs are calculated on a percentage basis. The success fee is capped at up to 25% (inclusive of VAT) of the compensation award you receive for your personal injury and past financial losses. 25% success fee is the maximum fee that the Ministry of Justice allows solicitors to charge.
It is important to be aware that deductions from any compensation for future care, future treatment, and any future loss of earnings is not permissible, although we are aware of some firms who continue to do so.
In summary, the whole of your compensation claim is not affected by this 25% cap, just the part of the claim which is linked to your physical injury, and money you have directly lost or paid out as a result of that injury.
In order to attempt to balance this out, the government increased the amount of compensation awarded for physical injury by 10%, to try to help absorb those expenses for the individual making the claim.
The most common legal matter which uses a No Win No Fee agreement is Personal Injury Compensation Claims. It doesn’t matter whether you were in an accident at work, a road traffic accident, or you were injured due to a medical negligence, your injury compensation claim could be dealt with using a No Win No Fee agreement.
The long and short of it is, if someone else caused your injuries or illness, you could make an injury compensation claim on a CFA. Here’s a list of the types of injuries our Personal Injury Solicitors could help you to make a claim for:
The point of the agreement is to protect you from a high bill if your matter isn’t successful, therefore you would not have to pay a penny.
There are insurance policies available, known as After the Event Insurance, which can be taken out by your solicitor to cover the costs of court fees and other disbursements, if your claim is unsuccessful. If you lost your case, you would not have to pay the premium of this policy, either, so the No Win No Fee Agreement would still not cost you a penny!
The exception to this rule would be if the Court decided that you had acted dishonestly or maliciously in making your claim and if you breach the agreement. Your solicitor should explain this at the outset of your case, with details included in the CFA Agreement.
However, the chances of this are minimised greatly by our specialist team of Personal Injury solicitors, by ensuring that we have all the facts before we commence any No Win No Fee agreement claim.
Mr S is involved in an accident at work and receives damages totalling £140,000.
The damages are broken down as follows:
£25,000 for the injury,
£15,000 for past losses, and
£100,000 for future care, treatment and losses.
The Success fee is applied as follows:
25% of general damages (£25,000) = £6250
25% of past losses (£15,000) = £3750
0% of future care, treatment and losses (£100,000) = £0
The success fee is therefore capped at £10,000 (inclusive of VAT) meaning deductions from Mr S would be capped at £10,000.
General damages for pain, suffering and loss of amenity £25,000 Success fee 25% = £6250 Damages for pecuniary loss other than future pecuniary loss net of CRU £15,000 Success fee25% = £3750 Damages for future care, treatment and loss £100,000 0 Total damages £140,000 Total success fee £10,000If you have had an accident that is not your fault, then please do contact one of our specialist solicitors on 0161 339 1231 to discuss your case.
Remember, because we offer a no win no fee service, you have no upfront fees to pay. The only event in which you will have to pay out will be if your case is successful.
By Emma Pearce, Solicitor
