No win No fee. What is it and how does it work?

[TC]

Over the past few years, the legal profession has been kicked in the chops on more than one occasion because of all the bad publicity caused by the likes of Claims Direct, The accident group, (TAG) and other accident management firms. This has occured mainly because these firms were unregulated, and quite often having won an award on behalf of their clients (in many cases undervalued), they then ended up giving the client a large bill for the accident management firms costs which then came out of the clients compensation, often leaving the client in debt.

This led to people slagging off the No Win, No Fee situation, because many thought they would end up with a large bill from the law firm or whoever at the conclusion of the case, so I thought I would take this opportunity to perhaps put the record straight as far as proper law firms are concerned.

No win no fee means exactly that. If you win the defence pay all your legal costs, all disbursments and your compensation. If you lose, then the defence legal fees are paid and your solicitors get paid nothing, but you will not end up with a bill yourself.

The way this works, is that you approach a solicitor for injuries sustained in an accident. Your case is screened and a risk assessment is carried out. During the screening the chance of success in winning your case will be decided, which is then converted into what is called a success fee.

If your case is accepted, then you will be signed up to what is called a conditional fee agreement (CFA) which in simple terms is an insurance policy that is taken out on your behalf. The premium can be anything from £200 - £800 depending on the type of case, but if you don't have that type of money to hand, then you can ask for what is called deffered payment which means that the solicitors will pay the premium for you and then claim it back at the end of the case from the defence. For this privelidge you may be asked to pay a small amount of interest normally about 2%, but many firms don't bother

At the time of entering into the CFA, the law firm will give the insurers the success fee I mentioned earlier. What this means is that if for example your case has been assessed at say a 60% chance of success, then on winning the case, they will get an uplift on their fees by 60% as well as their normal fees, all disbursments and your compensation, and they will have to pay the insurance premium.

If you lose the case, then the insurance will kick in and pay all your legal costs, all disbursments and any compensation you may have to pay. If you lose, your solicitor will be paid nothing, but you cannot be given a bill for any legal work as it is a condition of entering into a CFA.

The only time you may get a bill under the terms of the CFA is if you cease to instruct your solicitor on an ongoing basis, or, if you are given professional advice which you choose to ignore and act contrary to the advice you were given, then the CFA could be cancelled and you become personally liable for any fees.

If you decide to change solicitors mid case, then this is not normally a problem, it just means that the solicitors will only get their normal fees with 0% uplift. The fees of the old solicitors will normally be added to the schedule of losses at the completion of the case.

I hope that this clarifies things somewhat. It is a little more involved, but I have tried to keep it simple and understandable. If you go with a proper law firm, it really is a failsafe as far as you the claimant is concerned, it is available to everyone, and it might save you a few shillings by virtue that it really is not neccasary to have legal expenses insurance, and it means that you can choose who represents you rather than an insurer appointing one of their tame puppets.