A Guide to No Win No Fee Claims
Find out everything you need to know about making a successful No Win, No Fee personal injury compensation claim.
No Win, No Fee is an agreement with your solicitor (technically known as a 'Conditional Fee Agreement' or CFA) that means that you can make a personal injury compensation claim with:
- no upfront legal fees
- no solicitor's fees payable if your claim is not successful
- a success fee payable only if your claim is successful
Please note, under a No Win, No Fee Agreement (CFA), fees may apply if a claimant refuses to cooperate, or abandons their claim after the legal work has started, or if the claim is fraudulent.
Under a Conditional Fee Agreement, your solicitor agrees that you will have no legal fees to pay whatsoever if your claim is not successful.
If your claim is successful, a success fee (typically up to 25% of your compensation settlement) is paid to your solicitor. To take the financial risk out of making a claim, a Conditional Fee Agreement is underwritten by an After the Event (ATE) insurance policy. This policy covers the defendan'ts legal fees and costs and any costs incurred by your solicitor e.g. medical reports and court fees.
Your solicitor will arrange the ATE policy as part of your no win, no fee agreement. You will not have to pay for the policy if your claim is not successful. If your claim is successful the policy cost is deducted from your compensation award.
The details of the No Win No Fee agreement, including the success fee percentage, will be explained to you before you instruct your solicitor.
A No Win No Fee claim should be possible if you were injured:
- in the last three years and (longer if children were involved) and,
- someone else was to blame (even partly).
In practice, there are a number of other factors that can affect your eligibility for No Win, No Fee.
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.
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 maybe less.
So I will lose 25% of my compensation?
Not exactly. If the success fee you agree with your solicitor is 25%, there would be a 25% deduction from your compensation award if your claim is successful.
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.
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.
Before signing a No Win No Fee (CFA) agreement with a solicitor, it is important that you read the terms and conditions and check what fees and costs are included and not included.
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.
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.
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.