What does ‘No Win No Fee’ really mean when making a claim?

If a Solicitor were to withdraw from a claim and you then went on without representation to settle the claim, you would not have to give the Solicitor a penny. However, if a new Solicitor takes over the running of a claim from a previous Solicitor, the previous Solicitor may preserve a right to recover their lien costs from the new Solicitor – when the new Solicitor receives settlement from the defendants.

LEI is ‘Legal Expenses Insurance’ (and also known as BTE – ‘Before the Event’) and is often an add on that is included with various insurance policies, financial products or memberships of certain societies or bodies.

Your Partner’s Solicitor is acting correcting in ascertaining what, if any legal expenses insurance your Partner has in place that may prove to be helpful in the pursuit of their claim. If a claimant has no LEI/BTE insurance in place, a Solicitor may recommend that an ‘After the Event’ insurance (ATE) policy is purchased to help with the claim. The claimant wouldn’t pay for the insurance if they lost their claim, but would cover the premium from their settlement if they succeeded. In most cases, ATE is not needed or recommended, but if a claimant has LEI or BET in place, it can enable a Solicitor to take more risks with a claim – especially if it is proving difficult to get the defendant to make a sensible settlement offer. Generally speaking, our Solicitors no longer recommend such policies.

Please rest assured that using any existing LEI/BTE insurance has no impact on renewal premiums and is not seen as a claim on your motor insurance or home insurance etc – these policies are there to be used when legal help is needed – whether that be a personal injury claim as in this case, or if you had a dispute with a contractor, neighbour or some other sort of need for legal services.

Sadly, the person with whom you were speaking is incorrect – unless their claim was for an accident that happened before the personal injury reforms came in to effect on 1st April 2013. Before these changes, claimants could retain 100% of their compensation and recover all of their costs from the defendants. Unfortunately now, claimants cannot recover all of their costs from the defendants and they cannot recover ATE insurance premium costs either. Therefore, a claimant will have to contribute from their settlement should they succeed.

Our No Win No Fee service guarantees that a claimant will NEVER contribute any more than 25% towards their costs and our Solicitors will not recommend that a claimant takes ATE insurance except in very rare cases where the benefits of doing so are obvious and worthwhile. Some companies do continue to recommend often expensive ATE policies. Whilst the claimants would never pay anything if they are not successful with their claims, some claimants end up contributing far more than 25% of their settlement towards costs if they don’t choose the right specialist provider (like us!) to act for them.

The situation that you find your claim in ‘low velocity impact’ (LVI) is problematic for claimants. Whilst there is no defined evidence to prove that soft tissue injuries such as whiplash cannot be sustained at low speeds, there is also no evidence to prove definitively that such injuries can be sustained. This has opened an escape route for insurers to refuse to compensate for personal injury even when they admit liability for the car accident and vehicle repair costs.

Your Solicitor is correct in that as the defendant has refused to accept liability, taking the matter to court is risky. You would be relying on the Judge finding in your favour and compelling the insurers to compensate you – in which case, they would pay court costs and the majority of your Solicitors cost (less your 25% contribution). However, if the Judge were to find in favour of the defendants – which is sadly a realistic possibility – you would not only obtain compensation, but you would also have to then pay the defendant costs.

Switching to a different Solicitor is unlikely to make any difference to the outcome of your claim and given the nature of the cost burden, a new Solicitor would be very unlikely to wish to take your claim further as it would be financially unviable for them to do so.

Whilst your Sister can seek to switch to a new Solicitor, the process is far from easy unless the previous Solicitor has breached the terms of their Conditional Fee Agreement, they will still require payment for their work should the new Solicitor succeed with the claim. This would require the new Solicitor to give an undertaking to the previous Solicitor to meet their costs on settlement. As you can imagine, this may well make it financially unviable for a new Solicitor to get involved (depending on the total value of the claim and total legal costs).

As there appears to be questions about the handling of the claim by the Solicitors appointed, it may well be a good idea to make a formal complaint to the firm in question outlining the areas of concern and why it is felt that they have not acted in the best interests of your Sister – the claimant. If they uphold the complaint, they should resolve matters and ensure that your Sister can settle her claim in a way in which she is happy. If they cannot do so, the complaint can be escalated to the regulatory authorities and legal ombudsman.

Much will depend on the terms of the CFA you signed with the Solicitors. How long into the process was your decision to cancel?

A Solicitor cannot obtain a compensation settlement without having provided written advice of the offer and obtained a signed authority to accept it. Therefore, if you haven’t yet signed the authority, your Solicitor cannot have the settlement.

It is certainly not the norm for a client to be required to fund such situations. It would be prudent to ask your Solicitor to put their reasoning for this requirement to you in writing and to request that they confirm that you would be able to recover any such fee should you succeed. Also, I would ask them why they are not able to fund this themselves under the conditional fee agreement you have previously signed.

Our Solicitors will deduct no more than 25% of any awarded damages. The only other potential ‘cost’ to a client may be if an ATE policy is needed – although it is rare that such cover is advised these days. If ATE cover is needed, a claimant will not pay the costs of the premium if the claim is unsuccessful, but will have to cover the cost from their settlement alongside a maximum deduction of 25% of the total settlement.

If your wife would like to discuss her potential claim with us, we’d be more than happy to consider the matter and pursue it if viable to do so.

The length of delay in the 3rd party making the interim payment is not normal, although it is common for defendant insurers to be somewhat slow in making payment.

To answer your question simply, the answer is no – never! When pursuing a claim on a No Win No Fee basis, you will never pay any costs should your claim succeed. Whilst all claimants must contribute to their own legal fees when pursuing a claim for personal injury compensation, our Solicitors will deduct no more than 25% of any compensation received regardless of the total cost of the claim. In rare cases, an additional ‘After the Event‘ insurance policy may be needed, but this is certainly not the case in the majority of claims. If ATE cover is needed, the claimant would only pay the premium if they were to succeed with their claim and again, it would be a relatively small value compared to their final settlement.

If a claimant withdraws from the claims process or fails to cooperate, a Solicitor is within their rights (as stated in any and all Conditional Fee Agreements) to pursue the claimant for costs. This is because when acting on a conditional fee basis, a Solicitor can only recover their costs if they succeed with a claim. Whilst the claimant will never pay if the claim fails for reasons beyond their control – such as a robust defence or insufficient evidence – if the claim fails because the claimant has been dishonest or simply opted to pull out, a Solicitor will be left unfairly out of pocket.

Whilst the ‘right’ for a Solicitor to pursue a claimant for costs exists, the reality is that it would rarely be followed through – simply due to the costs of such action and the fact that they would probably not receive payment anyway.

Clinical Negligence although personal injury, are slightly different to the ‘normal’ claims when an injury has happened in a non-fault accident and we have no reason to question the integrity of your Solicitor. In normal circumstances, a claimant should be able to undergo a specialist medical assessment at no cost (the cost is met by the defendant if they admit liability). Have you already had any such medical? If a 2nd medical is requested, that will be a cost that the claimant has to meet, whether they win, lose or draw!

Have you asked your Solicitor why they cannot fund the medical for you as a disbursement and reclaim the cost from the defendant if they succeed with your claim?

Of course, if liability is admitted, you shouldn’t worry too much as you will get the costs back when you settle your claim.

Thanks, Ian.. I’ve emailed my solicitor. Of course, I agree with you why can’t the solicitor meet the cost if he’s that confident that we have a strong case? I was even thinking of contacting my insurance company who offer legal cover just to cover the cost? Seems very inefficient.
Let’s see how he replies..

Good luck – hopefully the Solicitor will be able to provide helpful support.

Given the timeframe you mention, you have every right to feel uneasy about the claim. You should request some written evidence from your Solicitor as to what they have done and you could even consider complaining to force them to fully update you about the situation. If you exhaust all avenues of working with your current Solicitor, you can then seek to switch to a new Solicitor to pursue the claim for you.

It is hard to advise as to whether or not your Solicitor is advising you correctly but we would always assume that the Solicitor is acting correctly and advising you in your best interests. However, you cite a hefty drop in damages and are well within your rights to be unhappy with the lowering of possible damages. However, your Solicitor maybe right and as per the terms of the Conditional Fee Agreement that you would have signed with them, they are able to terminate a No Win No Fee agreement if you ignore their advice.

I would suggest that you should ask for a different Solicitor within the same firm to review your file – perhaps via the Solicitors complaints policy (which would be published on their website) in order for a fresh view on things.