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No Win No Fee is a common way of making a claim for personal injury compensation without the claimant risking extremely expensive legal fees. However, there are important key facts potential claimants should understand and consider regarding this method of funding legal action before they instruct a Solicitor to act for them.
Table of contents:
- No Win No Fee summarised
- What do I pay if I win my claim?
- What do I pay if I lose my claim?
- Can I ever be charged if my claim fails?
- Can I cancel a no win no fee aggreement?
- Who pays Direct2Compensation?
- Your questions answered
No Win No Fee Summarised
The option of being able to pursue a legal action on a No Win No Fee basis is an important and vital legal right that affords people the opportunity to seek justice and redress from a 3rd party, without risk to their own finances. Without No Win No Fee options, a claimant would have to have personal wealth to be able to pursue their claim.
A No Win No Fee agreement (officially known as a Conditional Fee Agreement or CFA) enables a Solicitor to pursue a claim on the basis that they will charge no fee to the claimant if they fail to succeed with the claim. If successful, it allows the Solicitor to recover the majority of the claimant’s legal fees from the defendant and deduct a small percentage from the claimant’s settlement to cover the remaining fees.
A Solicitor will evaluate the strengths and weaknesses of a claim at the outset before they then decide if the prospect of success outweighs the prospect of failure. If a Solicitor is of the view that the claim has a realistic prospect of succeeding, they may offer to pursue the matter for the claimant on a Conditional Fee Agreement (No Win No Fee) basis.
A claimant will pay nothing if their claim is unsuccessful so long as they have not acted fraudulently and have cooperated fully with their Solicitor during the pursuit of the claim.
What do I pay if I win my claim?
If a Solicitor succeeds with a No Win No Fee claim for their client, they will ensure that the full extent of any injury (and the long term consequences of the injury) are fully understood and that the maximum amount of compensation will be negotiated for the injury. Also, the Solicitor will ensure that all lost income and incurred costs that can be attributed to the injury are recovered. This will form the total settlement of the claim and the value will be agreed between the Solicitor and claimant and then negotiated with the defendants.
When settlement is agreed and the balance forwarded to the claimant, the Solicitor will – as per the terms of the Conditional Fee Agreement (no win no fee) signed at the outset, deduct up to 25% of the awarded compensation. This deduction goes towards the Solicitors legal fees, with further costs chargeable to the defendant. The only other cost that a claimant may face on success of their claim is for any provided After the Event (ATE) insurance cover that the Solicitor had to put in place at the outset of the claim. The law prohibits successful claimants from recovering the cost of ATE cover from the defendants on success of a claim. If such cover is needed, the cost is typically between £150 & £250 but this can vary. Again, it is only payable if and when a claim succeeds and never payable if a claim fails.
If a claimant has pre-existing Legal Expenses Insurance (LEI) cover in place, a Solicitor will attempt to use that, meaning that there will be no further cost when succeeding with a claim.
What do I pay if I lose my claim?
Whilst any claim that is pursued is taken on with the genuine hope of succeeding, there is always a possibility that the claim will fail. It may be that the defendants are able to mount a robust defence at the outset and demonstrate that the claim will not succeed, or it could be that the claim end in a court hearing and a judge decides that it is not reasonable to hold the defendant liable.
Whilst the failure of any claim is extremely disappointing for the claimant, the claimant will not face any costs whatsoever in such circumstances, so long as the information they have provided to their Solicitor was honest and they have cooperated fully with their Solicitor during the process of the claim.
The claimant will not pay their own Solicitor’s costs, or those of the defendants, as the liability for such costs will be met by the Solicitor by way of the claimant’s pre-existing LEI cover or by way of ATE insurance cover put in place by the Solicitor. It is important to note that the claimant will NOT pay for any ATE cover if their claim is not successful.
Can I ever be charged if my claim fails?
If you, as a claimant, have acted honestly, cooperated with your Solicitor fully (answered questions, attended medical assessments, responded to queries etc) you will never pay a penny to any person should the claim eventually fail for reasons beyond your control.
However, claimants must be aware that a Solicitor does withhold the right to recover costs if it is found that a claimant has acted fraudulently and caused the Solicitor to incur costs in their efforts to pursue a claim that is found to be dishonest or incorrect. Also, if a claim were to fail because a claimant failed to cooperate with their Solicitor, return signed authorities within an agreed deadline, failed to attend a medical assessment or court hearing, a Solicitor is within their rights to pursue that claimant for their costs as they can not recover their costs from a defendant if the claim fails due to the fault of the claimant.
Finally, a claimant may be pursued for costs if they decide to withdraw from their claim before it is settled. The reason for this is that their Solicitor will have incurred costs – both from the hours of work that they would have conducted on the claim and also disbursements (medical records requests, medical expert instructions etc) – and they will no longer be able to recover them from the defendants.
Claimants who are worried about pursuing their claim should always speak with us or their Solicitors before they decide to withdraw from the process. We are humans and we care. We understand that people may have anxiety about taking legal action and we’re here to help make sure that you have the confidence to pursue the matter fully.
Cancelling a No Win No Fee agreement
Whilst it is rare for a claimant to cancel their claim, all claimants have the right to terminate their No Win No Fee agreement with a Solicitor that has been instructed. All claimants will be made aware of this at the signing of their agreement with their chosen Solicitor. Any claim cancelled within the first 14 days is within a cooling off period and no fees would be payable to the Solicitor. However, claimants are reminded that they should be aware that they may be required to pay fees to their Solicitor should they choose to cancel their instruction to their Solicitor after the 14 day period, as the Solicitor will be unable to recover the costs for the work that they have undertaken.
Who pays Direct2Compensation?
The claimant will never pay a penny to Direct2Compensation, win or lose. We are not funded by the claimant. The specialist personal injury Solicitor firms who form our specialist partner panel pay us. Their payments are not based on a volume of claims or on success or failure meaning that we have no motivation for attempting to pursue low quality claims or to pressurise claimants in to taking action. Our specialist Solicitors have a proven track record of success and our clients give excellent feedback as to the quality of service provided by them.