How does the ‘no win, no fee’ system work?

No win, no fee is often misunderstood. Essentially, it is an agreement between a client and a solicitor that states that if a case is lost then the solicitor will waive all their legal fees. No win, no fee came about after a change in Legal Aid in 1995. Before that date, if you wanted to make a personal injury claim then you could apply for Legal Aid to pay for the hiring of a solicitor. However, after the government stopped Legal Aid for civil disputes, solicitors took cases on the basis of ‘no win, no fee’ to ensure that everybody could have access to the courts.

What is a no win, no fee agreement?

The term ‘no win, no fee agreement’ indicates that if you lose your personal injury case, you will not have to pay any solicitor’s fees or costs. Legal advice can be costly, and without a no win, no fee agreement, a claimant could end up owing a solicitor a lot of money if they failed to win their case.

If the claim is successful, legal costs are covered by the losing party, though you may still have to pay your solicitors fee out of your compensation. If the claim fails, you will not have to pay your solicitor any fees.

Will I receive 100% of my compensation?

Whether or not you receive 100% compensation depends on the agreement you enter with your solicitor. Most solicitors will charge a success fee, which means if your claim is won, part of your compensation (a maximum of 25%) will be taken by your lawyer. Some cases may still be taken with a 100% compensation clause, but changes in the law regarding no win no fee claims, introduced in April 2013, means that most solicitors no longer offer this option.

However, the average damages awarded have increased by around 10%, which somewhat offsets the solicitors fees you might have to pay.

Are there any other costs involved in no win, no fee claims?

No win, no fee doesn’t necessarily mean that there won’t be any costs associated with court action. If you lose a case, the opposing side has the right to claim court costs and their solicitor’s fees from you. However, this only happens on rare occasions, as few solicitors who operate on a no win, no fee basis would be willing to risk losing a case. In addition, your solicitor will usually advise that you should take out “After Event” insurance, which will cover you for any costs you are liable for if you lose the case.

 

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