No Win No Fee Compensation Claim
This article sets out everything you need to know about making a successful no win, no fee compensation claim.
Even if you do qualify, there are still a number of other points that many solicitors will take into account before taking a claim on.
If you have been injured in an accident that was not your fault, you could be eligible to make a no win, no fee compensation claim.
No Win, No Fee, technically known as a 'Conditional Fee Agreement' (CFA), means that you can make a personal injury compensation claim with:
- no financial risk or upfront legal fees
- no fees payable if your claim is not successful
- a success fee payable only if your claim is successful
Conditional fee agreements (CFAs)
A CFA is a legal agreement entered into between the injured person (the Claimant) and the personal injury solicitor.
CFAs were introduced in 1998 to help people fund legal claims on a no win, no fee basis, after Legal Aid was no longer available for most personal injury claims.
The CFA sets out what the solicitor will do, and how the solicitor will be paid in the event that the claim is successful.
What if the compensation award does not cover the legal costs?
Any success fee deductions are capped by the Ministry of Justice (MOJ) at 25% of the total compensation. This means that your solicitor cannot recover the balance from you, unless:
- the CFA states otherwise
- you agree to this contribution to costs.
It is very important to read the CFA carefully before signing it.
What is ATE insurance?
If your claim is unsuccessful then you will not have to pay any legal fees to your solicitor.
This does not mean your solicitor has worked for free, however. The solicitor's fees may be paid out of an insurance policy taken out at the start of the claim. This policy is referred to as 'after the event' or 'ATE' insurance.
ATE insurance also covers any costs incurred by the other side (the Defendant ). Without ATE insurance, you would be obliged to pay these costs yourself in the event that your claim was not successful.
ATE insurance effectively underwrites the No Win, No Fee agreement - protecting you from incurring any fees if you don't win.
The cost of the policy is paid by the defendant when you win the case and there is no cost to you if you do not win.
Making a No Win, No Fee claim is a very straightforward process.
When you start a No Win, No Fee injury claim, your solicitor will ask you a few basic questions about the accident or cause of your injury. Your solicitor will then advise whether you have a good chance of making a successful claim.
The first steps
If you decide to pursue a claim then the solicitor will send you a Conditional Fee Agreement for you to read and sign. This document is effectively the 'terms and conditions' of your No Win, No Fee claim.
What happens next?
The solicitor will then take a further details so that they can investigate your claim and gather evidence. Once the solicitor has collected the evidence in support of your claim, they will write to the insurance company or lawyer representing the party who caused your injury (the defendant).
Your compensation settlement or award
The defendant’s insurer or the lawyer will consider the medical and other evidence and will usually negotiate a settlement.
The vast majority of injury claims are settled out of court.
What happens if I win my No Win, No Fee claim?
If you win your claim, you will be awarded general damages in respect of your injuries and special damages in respect of any financial losses (such as loss of earnings) you have incurred. These damages are usually paid by the defendant's insurance company. The defendant will also be liable for your legal costs.
The solicitor will receive a success fee which is deducted from the compensation settlement.
What happens if I lose my No Win, No Fee claim?
If your claim is not successful you will not have to pay any legal fees at all.
Some No Win, No Fee Agreements only cover the solicitor's fees. Costs that are not covered might include medical expert fees, barrister's fees or the costs of the other side's solicitors as they defend the claim. These costs can run into thousands of pounds.
Solicitors working on a No Win, No Fee basis charge nothing if a claim is unsuccessful and a success fee if the claim is successful.
By law, success fees are restricted to a maximum of 25% of the total settlement, and may be less.
So I will lose 25% of my compensation?
Not exactly. There will be a 25% deduction from your compensation award. However, since 2013, compensation awards agreed on the basis of No Win, No Fee have been increased by 10% to offset the impact of the success fee deduction.
Can I negotiate a lower success fee with Quittance?
In an ideal world, there would be no financial deductions from a claimant's compensation settlement. Quittance's high claim success rates mean we can however adopt a fairer approach for claimants.
Depending on the specifics of your case, our solicitors will usually discuss the success fee percentage.
A claim should be possible if you were injured:
- in the last three years and (longer if children were involved) and
- your employer was to blame (even partly).
However, some personal injury solicitors might not take on your claim, even if you do qualify.
How to compare No Win, No Fee solicitors
Not all No Win, No Fee personal injury solicitors work on the same basis. Some lawyers will routinely charge a 25% success fee. Other firms will only charge a smaller percentage to cover the legal costs incurred running your case.
The short answer is, it depends.
Some solicitors will refuse to negotiate. Also, in the case of more minor injuries, a solicitor may be unable to afford to take on and run a case on less than a 25% fee basis.
Quittance solicitors will discuss the most competitive success fee with you once we have a brief understanding of your case.
Quittance is a panel of highly experienced no win, no fee personal injury and medical negligence solicitors. Our solicitors have an excellent track record of winning even the most difficult cases and will fight for the best possible compensation settlement for you.
To speak to us about making a no win, no fee claim, without obligation, call 0800 612 7456 or click here to arrange a callback.
Can I make a No Win, No Fee claim?
In order to make a No Win, No Fee claim you will need to have suffered an injury as a result of another person's recklessness or negligence within the last 3 years. There may also be other criteria affecting your eligibility to claim.
No Win, No Fee - Can I keep 100% compensation?
The majority of firms that offer No Win, No Fee do so on the basis that 100% of your legal fees are covered in the event that you lose. This means there will be nothing to pay under those circumstances.
A small number of firms market a 'keep 100% of your compensation' offer, stating that they do not charge the standard 25% success fee.
It is worth checking the small print for these offers, as there are often other fees or 'disbursements' that are still deducted from the compensation, and 'catches' that could mean additional fees are still due if certain conditions are met.
It may also be the case that these firms will only take higher-value cases that are very likely to succeed.
Can I claim through Legal Aid?
In 2000, the government abolished the right to legal aid in personal injury law cases. Claims are now usually pursued through No Win, No Fee agreements.
What is ATE insurance?
'ATE' or 'After the Event' insurance is an insurance policy that is purchased after an injury has occurred. The policy covers all solicitor fees and disbursements of the defendant in the event that a personal injury claim is unsuccessful.
The policy you need is usually specified by your solicitor and purchased on your behalf.
An ATE policy is not usually required if the claimant has 'BTE' or 'Before the event' Insurance. ATE insurance is usually purchased in the absence of suitable BTE cover and is specifically tailored to the type of claim you are pursuing.
What is BTE Insurance?
'BTE' or 'Before the Event' insurance (often referred to as 'Legal Expense Insurance') refers to any policy that may already be in place when an injury jury occurs. A typical example would be legal cover which may be purchased with a motor insurance policy.
Are there any No Win, No Fee pitfalls?
Under certain (and very rare) circumstances, for example where the claimant is making a fraudulent claim, the No Win, No Fee agreement will no longer apply. Your solicitor must explain these exceptions to you before you instruct.
Your solicitor will also make you aware of any costs that may be incurred should you wish to abandon a valid claim.
Some CFAs also entitle a solicitor to take a portion of your compensation even if you disinstruct them and choose to work with another firm. This will be made clear in the terms of the CFA and your solicitor can explain this in more detail.
Who pays my No Win, No Fee compensation?
Although the party who is found to be liable for your injuries is technically liable to pay your compensation, in practice, it is usually their insurance company who pays. For this reason, employees do not need to worry about 'damaging their employer's business'.
An employer is required by law to hold employers' liability insurance to cover the cost of any injury claims made against the company, either by staff or by members of the public.
Is there anything else to pay?
In addition to solicitor's fees, there may be disbursements such as:
- The cost of a medical examination and report by a GP or specialist consultant
- The cost of an expert witness's report
- A barrister's fees if the case goes to court
If you win, the cost of these disbursements is either recovered from the other side, or deducted from the compensation settlement. In the event that you lose, the cost of these disbursements will be covered by the ATE insurance taken out at the start of the claim.
How will changes in the law affect you?
The Jackson reforms and LASPO - Changes to No Win, No Fee
The way personal injury claims in England and Wales are handled fundamentally changed in 2013.
Prior to 2013, Lord Justice Jackson reviewed civil litigation costs and access to justice. Lord Jackson's report made a number of recommendations, including changes to the way CFAs worked.
The reforms also suggested that a claimant would no longer be liable to pay the defendant's legal costs if the claim is not successful. This is referred to as 'Qualified One Way Shifting', or 'QOCS'.
The Legal Aid, Sentencing and Punishment of Offenders Act 2012, often referred to as 'LASPO' was enacted in April 2013, and meant that solicitors acting for injured claimants could no longer recover all of their legal costs from the defendant if they won. Specifically, success fees were no longer recoverable.
To offset the fact that success fees were now deducted from the claimant's compensation, LASPO also allowed for compensation for general damages to be increased by 10%.
Proposals are being debated in Parliament that will have a major effect on personal injury claimants. The details are still being worked out, but the proposed changes currently include:
- Raising the small claims limit to £5,000
- Significantly reduced awards for soft tissue injuries (including whiplash)
These reforms are unlikely to be enacted in the very short term, with early 2019 being the likely start. However, complex or disputed claims can take months to reach a successful outcome.
If you are concerned your claim may be affected by the reforms, you may wish to speak to a solicitor as soon as possible and start your claim without delay.