What is No Win No Fee?
You may have heard the term 'No Win No Fee' used regularly in relation to pursuing a claim for compensation, but what does it actually mean for you, the claimant, in practice?
A no win no fee agreement is also known as a conditional fee agreement, or a CFA. Under the terms of this agreement, we agree not to charge you for our fees until your case has settled. If your claim is successful, most of our fees will be paid by the Defendant. In the event that your case is unsuccessful, we will again not charge you our fees.
Changes in Legislation
On the 1st April 2014, the Government changed how legal costs and funding for personal injury claims are paid. As a result of these changes, solicitors are no longer able to recover all of your legal costs from your opponent. These changes mean that we are no longer able to recover the success fee or the cost of an ATE policy from the Defendant.
The Government has therefore stated that these costs must be met by the Claimant and deducted from damages. In recognition of this extra cost to the Claimant, the Government has increased the damages awarded to Claimant's for their pain, suffering and loss of amenity by 10%. The level of deduction will depend on the nature and value of your claim.
Why do Solicitors Enter into a No Win No Fee Agreement?
As stated above, if your no win no fee claim is not successful we will not be paid. In order to recognise this risk, we are entitled to claim what is known as a 'success fee'. This is also known as an uplift and is a percentage of the costs or damages awarded.
What is an After the Event (ATE) Insurance Policy?
In the event you do not have Before the Event Insurance we will discuss the funding options available to you. In most cases, the most suitable form of insurance would be an After the Event Insurance Policy. An After the Event Insurance Policy covers the Defendant's costs, which they would be awarded should your case not be successful.
The cost of the ATE insurance policy is, like the legal fees, deferred until the end of the case. If the compensation claim is successful, the cost will be deducted from your damages. If the case is lost, no payment is required as the premium is self-insuring.
What Do I Have to Pay?
Following the changes in legislation, the Claimant must now pay the cost of the ATE premium and the Success Fee. These costs are deducted from your claim at the conclusion of your case and you are not required to make any payments up front. In the event that your claim is not successful you will not be responsible for any charges as the ATE premium is self-insuring. We will not incur any expenses on your behalf without your agreement and authority to do so.
Essentially, a no win no fee agreement means there is no financial risk to you. Want to know a bit more about us? Visit our who we are page.