Accidents are an unfortunate fact of life, and sometimes however careful you may try to be, sometimes people are injured in an accident which isn’t their fault. You can’t seem to switch on the television without seeing a law firm telling you that you might be entitled to claim compensation if you’ve been involved in a case of medical negligence or a no fault accident . The majority of these companies also say in their advertising that they are “no win no fee”. But what exactly does “no win no fee” mean for the consumer, and what’s the history of it?
No win no fee is a relatively recent development in the legal world and was introduced as a way of helping people who could not afford to pay for legal help up front. As recently as 1995, solicitors were banned from representing clients on a no win no fee basis, and back in 1967 it was illegal for solicitors to have any financial interests in the outcome of a case.
In basic terms, a no win no fee agreement is just that. If the solicitor your have chosen to represent you in your medical negligence claim doesn’t win the case, you don’t pay them anything – and the solicitor doesn’t get any payment for working on a case he loses. This can be a pretty risky business strategy, and therefore as the solicitor is the one who is bearing the financial risk of losing out by not getting paid at all if the case fails, he is allowed to charge an additional “success fee” if the compensation claim is successful.
When no win no fee was first introduced, the success fee was usually a percentage of any compensation awarded to the person who had been injured, rather than being paid by the defendant. This was changed in 1999 though, when the Access to Justice Act stated that the solicitor’s fee would be paid by the losing side, rather than coming out of any compensation.
The Latest Changes to No Win No Fee
The Legal Aid, Sentencing and Punishment of Offenders Act 2012 came into effect in April 2013, and this made some more changes to the way conditional fee agreements work. No win no fee or conditional fee arrangements are still available in civil cases, but the losing side is no longer expected to pay the winner’s expenses. This is good news for defendant insurance companies who lose their case as they are no longer being forced to pay the opponent’s costs – but not such good news for the successful compensation claimant who will, with effect from April 2013, be responsible for the payment of any success fee to their solicitor out of their own compensation. The Act also capped the success fee a solicitor can claim at a maximum of 25% of the compensation which is awarded.
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