What is No Win No Fee Compensation and is there a catch?
If you have been injured in an accident and you meet certain eligibility criteria, you may be entitled to claim compensation on a ‘No Win, No Fee’ basis.
Take the risk out of making a personal injury claim
‘No Win, No Fee’ means you can make a legal claim for injury compensation without having to worry about paying any upfront costs.
If your claim is unsuccessful, you will not have to pay any legal fees to your solicitor.
If you win your case, your solicitor will receive a success fee. This fee would be deducted from the compensation settlement.
No Win, No Fee success fees percentage
Virtually all solicitors working on a No Win, No Fee basis charge a success fee. By law, this fee is restricted to a maximum of 25% of the total settlement, and may be less.
However, this does not mean that you lose 25% of your compensation. Since 2013, compensation awards have been increased to partially offset the impact of the success fee deduction. Read more about success fees.
How does a No Win, No Fee compensation claim work?
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.
A guide to No Win, No Fee compensation claims
If you decide to pursue a claim then the solicitor will send you a No Win, No Fee agreement for you to read and sign. This agreement which you enter into with your solicitor is known as a Conditional Fee Agreement or ‘CFA’. This document is effectively the ‘terms and conditions’ of your No Win, No Fee claim.
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). The insurer or lawyer will then consider the evidence and will negotiate a settlement.
The vast majority of injury claims are settled out of court. In rare cases, the defendant’s legal representative may not accept liability, meaning that the matter may go to court. Even if the matter does go to court, a barrister will usually agree to take your case on a No Win, No Fee basis.
What happens if I lose my No Win, No Fee claim?
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.
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.
When this compensation is paid, your lawyer will recover their costs and also the percentage success fee set out in your Conditional Fee Agreement. The success fee reflects the risk taken by your solicitor when they accept the case on a ‘No Win, No Fee’ basis.
What is a No Win, No Fee Conditional Fee Agreement (CFA)?
A No Win, No Fee agreement is also known as a ‘Conditional Fee Agreement’ or ‘CFA’ and is entered into between the injured person (the claimant) and a 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. The most important aspect of this is the percentage success fee that the solicitor charges.
Typical personal injury success fees
Following changes to the law in 2013, lawyers are no longer able to recover success fees from the defendant when they win a case. This can result in a shortfall between the work that your solicitor has done on your behalf, and the amount that they can recover from the other side.
This shortfall is recovered in the form of the success fee. In theory, the percentage success fee would vary, reflecting the work that your solicitor has done. In practice, however, the vast majority of firms charge the maximum 25% that can be deducted from the compensation settlement or award.
It would be very unusual for a firm to deviate from its standard 25% success fee. However sometimes where a case is particularly severe e.g. where a child has been injured, a firm may reduce the percentage or even waive the fee entirely.
What if the payout does not cover the legal costs?
Any success fee deductions are capped at 25% of the total compensation. This means that your solicitor cannot recover the balance from you, unless the CFA states otherwise, and you agree to this contribution to costs.
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 was asked to reviewing 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.
10% uplift in the compensation
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%.
No Win, No Fee solicitors - Why choose Quittance?
Quittance is a national panel of expert personal injury solicitors. Every month we help hundreds of people across England, Scotland and Wales claim maximum compensation for their injuries.
With over 100 solicitors with specialisms in all areas of personal injury law, we make sure that your case is handled by the best No Win, No Fee personal injury solicitor and with the most relevant experience.
Speak to us now on 0800 612 7456 to find out how we can give your claim the best chances of a successful outcome.
No Win, No Fee FAQs
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. For more information use our No Win, No Fee Eligibility Checker by clicking here.
Can I get 100% No Win, No Fee
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 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.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 the Legal cover purchased with a motor insurance policy.
How a solicitor gets paid if a ‘No Win, No Fee’ case is successful
A claimant’s solicitor’s fees or costs are usually paid by the losing defendant (or the defendant’s insurance company). The level of costs that a solicitor can recover from the other side, however, may be restricted, and some ‘unrecoverable’ costs may be deducted from a claimant’s compensation.
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.