What is “No Win No Fee” and how does it work? A Conditional Fee Agreement (CFA), known colloquially as “no win no fee”, is generally the only way in which PI claims are now funded. This type of arrangement removes the risk of running a case from the client and places it on the solicitor taking a case on. Before April 2013 if you entered into a CFA with a solicitor
- You would not have to pay anything if you did not win the case
- Ordinarily you could expect to receive 100% of any compensation awarded as all of the solicitor’s fees incurred in bringing the claim were recoverable from the defendant
Following a change in the law in April 2013, some of the solicitor’s fees (the success fees) are no longer recoverable from the defendant. A solicitor now has to recover that part of the fee from the damages awarded to their client. This has been capped at a maximum of 25% of the total amount of compensation awarded to the client. The same is true of the ATE (After the Event) Insurance policy premium (where applicable – see below) which is also not recoverable from the defendant. At TSP, if we are satisfied that the prospects of success in your case are good, we may offer to pursue a claim on your behalf by way of a Conditional Fee Agreement. This means that if your case is not successful you will not incur any costs. However, if your case is successful, you will need to pay all of the success fee capped at a maximum value of 25% of the compensation you have been awarded. If the amount of work your solicitor has undertaken totals more than 25% of your award then it is the solicitor that must bear this cost. Conversely you will, of course, only pay for the work undertaken, so, if this is less than 25% of your award, then this is what you will pay.
I’ve heard that I may need to get Insurance? If we agree a Conditional Fee Agreement with you, you will need Insurance. The type of insurance needed is called “After the Event” insurance and it is your solicitor who will arrange a policy on your behalf. This insurance is taken to cover your solicitor’s costs in the event that your claim is not successful. The premium for the insurance is only paid if your claim is successful and will be paid from your compensation. At TSP we include the cost of this premium in the 25% capped value of our fee. Some solicitors might charge this premium in addition to the 25% capped fee. At TSP we do not. We will discuss how this insurance works with you in greater detail when we meet with you.
Can’t I get Legal Aid? Legal Aid for Personal Injury work was abolished in 2000, so the answer to the question is no. Some clients do have legal cover as part of their household insurance which in some cases may be useful in pursuing a claim. This is something we will discuss with you as it is a possible alternative funding option. Sometimes, for a number of reasons, this doesn’t work out. If your claim has been rejected by your household insurers we would always be happy to give you a second opinion. We also have experience of “stepping into” cases where, for whatever reason, things have not been working out.
The final option for payment of fees is, of course, the “old fashioned” way. There is nothing to stop you, should you wish to do so, from paying your solicitors’ fees yourself, although as we said earlier, in this area of work this is very much the exception these days.