No Win, No Fee Explained
This article explains how making a no win, no fee injury compensation claim through a solicitor works, what happens if you lose your claim and what it could cost you if your claim is successful.
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 means that you can make a personal injury compensation claim with:
- no financial risk or upfront legal fees
- no legal fees to pay if your claim is not successful
- a success fee payable to a solicitor only if you win your claim
In 2000, the government abolished the right to legal aid for personal injury law cases. To ensure that injured people will still have access to justice, Conditional Fee Agreements (CFAs) were introduced.
Conditional Fee Agreements (more commonly referred to as 'no win, no fee'), mean that anyone injured as a result of another person's negligence or actions can pursue a claim without financial risk.
If you make a claim with a no win, no fee agreement, you will have no legal fees to pay if your claim is not successful.
What happens if I win my claim?
Before you start your claim, you will agree a 'success fee' with your solicitor. Success fees are typically up to 25% of your compensation settlement, but you will be able to discuss this with your solicitor before you sign anything.
So I will lose 25% of my compensation if I win?
Not exactly. There will be a 25% deduction from the compensation total. However, if you make a claim on a no win no fee basis, your compensation total is increased by 10% to offset the impact of the success fee deduction. The 10% increase was introduced by the courts after changes to the law in 2013.
Why do most injury solicitors charge 25% success fees?
The Ministry of Justice imposes a maximum success fee cap of 25%.
It was not until the legislation was introduced in 2013 that the liability to pay success fees moved from the defendant to the claimant. In most cases, other legal costs would still be paid by the defendant.
Many solicitors struggle to make a profitable business out of personal injury. To be successful, a firm must have a high case success rate and a very efficient business overall. 25% success fees are charged by most law firms in order to make a viable business.
However, general damages compensation awards are increased by 10% for no win, no fee claimants. This 10% uplift was introduced at the recommendation of Lord Justice Jackson in order to offset the impact of the success fee deduction.
Can I negotiate a lower success fee with my solicitor?
In an ideal world, there would be no financial deductions from a claimant's compensation settlement. Typically customers pay up to 25% of the amount recovered as a success fee. This will be subject to your individual circumstances and the actual fee may be more or less than this.
Your solicitor will discuss the success fee percentage at the outset of the claims process.
When is the success fee deducted?
The solicitors’ success fee will be deducted from your total compensation award, only after the final amount has been agreed. You will never have to pay any upfront fees and you will never be 'out of pocket'.
Are there other ways to fund an injury claim?
Yes. No win, no fee is by far the most common way to fund a personal injury claim. Depending n your circumstances, however, you may have other options including BTE or Before the Event insurance (often referred to as Legal Expense Insurance). BTE 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 or home insurance policy.
Other ways to fund a claim include:
- Damages Based Agreement (DBA)
- Legal Aid (in very rare circumstances)
- Trade Union Funding
What if I lose my claim?
If your claim is ultimately unsuccessful, you will not have to pay your solicitor a success fee or any other legal fees.
Will I have to pay for anything else?
No. At the start of your claim, your solicitor will take out an After the Event (ATE) insurance policy that will cover any other costs if that might arise, such as the defendant's legal fees. You would only pay the cost of this ATE policy if your claim is successful.
As a rule of thumb, a no win, no fee claim should be possible if you were injured:
- in the last three years (longer if a child was injured) and,
- another party was to blame (even partly).
In some circumstances, there may be other conditions that also need to be met in order to qualify for no win, no fee. Find out more:
Can No Win, No Fee solicitors help with any type of claim?
No win, no fee can be used whenever a person has been injured as a result of someone else's negligence. However, there are differences in the no win, no fee process, depending on how the accident occurred:
Our no win, no fee promise
When making a claim through Quittance, we guarantee 100% legal fee transparency. You will able to discuss and agree the details of your no win, no fee agreement with your solicitor, before starting your claim. You will have no legal fees to pay if your claim is unsuccessful.
How can Quittance help?
Your solicitor will fight for the best possible compensation settlement for you, and the highly-experienced panel of solicitors have an excellent track record of winning injury claims.
If you have any questions, or would like to start a No Win No Fee claim, we are open 8am to 9pm weekdays, 9am to 6pm on Saturday, and 9.30am to 5pm on Sunday.
Call us FREE 0800 376 1001 or arrange a callback:
if you can claim
to start a claim
Common questions about no win, no fee
Can I claim through Legal Aid?
No. In 2000, the Government abolished the right to Legal Aid in almost all personal injury cases. Claims are now usually pursued through No Win, No Fee agreements (formally called Conditional Fee Agreements, or CFAs).
Is No Win, No Fee the same as a Conditional Fee Agreement?
Yes. A Conditional Fee Agreement or CFA, is the legal term for a no win, no fee agreement.
A CFA sets out your personal injury solicitor’s terms and conditions. You will agree and sign a CFA when you start a personal injury claim.
Legal Aid is no longer available for most personal injury claims. CFAs were introduced in 1998 to help people fund legal claims on a no win, no fee basis.
Your CFA sets out what your solicitor will do, and how the solicitor will be paid after your claim is successful.
What is ATE insurance?
ATE insurance is a standard part of any no win, no fee injury claim.
If your claim is unsuccessful, you will not have to pay any legal fees to your solicitor. Any costs incurred, including the defendant's 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.
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
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.
ATE policies are known as 'self-insuring'. This means that you only have to pay for the policy if you win and the cost is deducted from your compensation.
Will I keep 100% of my 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 (called disbursements) that are still deducted from the compensation. There could also be 'catches' that could mean additional fees are still due if certain conditions are not met.
It may also be the case that these firms will only take higher-value cases that are very likely to succeed.
Who actually pays my No Win, No Fee compensation?
If you win, the defendant is technically liable to pay your compensation. In practice, it is usually the defendant's 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.
Will No Win, No Fee be available after 2021?
The Jackson reforms and Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) brought major changes to no win, no fee claims.
The way personal injury claims in England and Wales work was 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 short term, with April 2021 being the likely start date. However, complex or disputed claims can take months to reach a successful outcome.