No Win, No Fee Claims Explained
"No Win, No Fee" means that, in the great majority of cases, you do not have to pay your solicitor's fees if they fail to win your case.
If you win your claim, then the majority of your legal fees will be paid by the other side. In addition, you will be expected to pay your solicitor a "success fee" out of the damages that are awarded to you. The success fee compensates the solicitor for taking on the risk of non-payment should you lose your case.
The usual success fee is 25% of your compensation This is maximum deduction permitted by law.
There are two advantages to a Conditional Fee Agreement:
- First, you do not pay for legal advice and legal work if you lose your case, and
- Second, your solicitor is motivated to get you the maximum amount of compensation, since their fees come out of the award.
No Win, No Fee - an example
The simplest way to explain the No Win, No Fee Agreement is to run through an example.
Suppose a cyclist is injured when his bicycle is clipped by an overtaking car. The cyclist contacts a personal injury solicitor who analyses the case and determines that the cyclist has a strong chance of winning.
The solicitor agrees to pursue a claim against the insurer of the car driver funded by a Conditional Fee Agreement. Because the claim is No Win, No Fee, the cyclist does not have to pay any legal fees upfront.
The solicitor succeeds in proving the claim and the cyclist is awarded £5,000 compensation for the losses he has sustained.
Some legal fees owed to the cyclist's solicitor may be paid by the defendant, or in this case, the car driver's insurance company. The cyclist's solicitor is also entitled to a percentage success fee which is paid out of the cyclist's compensation at the end of the case. Assuming a success fee of 25%, the solicitor would be paid £1,250 and the cyclist would retain £3,750 of the compensation.
Had the cyclist lost his case, then both he and the solicitor would walk away with nothing.
Alternatives to No Win, No Fee
If you are willing and able to fund your own case, you can agree with your solicitor to pay them either a flat fee or their hourly rate, regardless of whether they win your case.
The downside to this approach is that, if you lose, you could be even worse off than you were at the start of your case.
The benefit of this option is that you would not owe your solicitor a "success fee" if the claim is successful.