Advantages and Disadvantages of No Win, No Fee Solicitors

It’s an unfortunate fact of life that accidents and injuries are sometimes unavoidable. Over three million people are injured in accidents every year in the UK, and many of these will involve situations where someone else caused the accident. If the person who has been injured has incurred financial loss or an injury (whether physical or psychological) because of the way other people have behaved, then there may well be grounds for a compensation claim. We’ve all seen the television adverts promoting the services of no win no fee solicitors and encouraging us to make a claim if we have been involved in these sorts of accidents. Before going ahead though it’s important to understand what no win no fee is, and whether it is the best way of taking forward a compensation claim.

No win no fee arrangements

Officially called conditional fee arrangements, these are legal contracts which say that if your solicitor does not win your compensation case, then you don’t have to pay legal fees. This means that the solicitor does not get any payment for the work they have done on the case if they do not win it. No win no fee agreements were first introduced in 1995 as a way of helping people afford the costs of making a claim for compensation. In effect, they were introduced at the same time as the government withdrew legal aid from the vast majority of personal injury compensation claims. Although we’re all aware of no win no fee agreements these days, they are a relatively new development in the legal world and prior to 1995 it was actually against the law for a legal professional to agree to represent a client on this basis.

If the solicitor wins the case and you are paid compensation, they also have the right to charge a success fee as they are taking a risk in taking on your case. Changes to the law recently mean that the success fee is not taken out of the compensation sum which you are awarded, and can be up to 25% of the total sum.

Conditional fee or no win no fee agreements are used for many different types of medical negligence as well as accident and personal injury claims, as long as the person concerned has suffered a financial loss or injury because of the actions or behaviour of other people. This covers accidents whether at work or while driving, industrial diseases and professional or medical negligence claims.

No Win No Fee – Advantages

No win no fee agreements are a very good way of reducing the risks associated with making a claim for medical negligence compensation. It also means that anyone, whatever their financial situation, can get access to justice. No win no fee agreements have helped open up legal services and make them feel more accessible, and the public regard these agreements as more informal.

The general consensus seems to be that most people feel that by using a no win no fee agreement they can go ahead and make a claim for compensation without the concern that if they lose they may have to pay expensive legal fees. It means that clients are protected from having to pay large sums in legal fees whether they win or lose their claim. If a case is lost the client does not have to pay any fees at all, and a case which is won means that instead of having to pay fixed fees or an hourly rate, a success fee is paid. Claims often go through more quickly using a no win no fee agreement as clients do not have to find any money up front – in the past this used to delay the claims process considerably as clients would have to get the money for legal fees together before embarking on the compensation process. An important part of any no win no fee agreement is the “after the event insurance” or ATE, which is a policy which is taken out to protect clients when a case is lost, meaning they are never out of pocket.

No Win No Fee – Disadvantages

Although there are many benefits of taking out a no win no fee agreement, it’s worth thinking about the other side of the coin too. Although no win no fee agreements reduce the risk involved of making a claim, the success fee which can be charged can mean that a large slice of the compensation awarded goes to the solicitor rather than their client. A change to the law in 2013 means that claims firms and solicitors are not allowed to say that 100% of the compensation awarded goes to the customer, even if their own fees and expenses are paid by the other side. If a claim is unsuccessful, in some circumstances the client might have to pay some expenses incurred by the solicitor working on the case, although it is likely that these costs will be covered by ATE insurance.

Considering both the advantages and disadvantages of the picture, you can see that there are clear benefits when using no win no fee agreements to make your compensation claim. It is true that people whose claim is successful face having to pay a success of up to 25% to their solicitor, but just because the percentage is capped at 25% doesn’t mean that all solicitors will take such a high percentage. Although 25% of the compensation might sound like a lot, it has to be balanced against the 75% or more of the compensation which will be awarded, and which the client wouldn’t have if they didn’t make their compensation claim at all. Given both the reduced level of risk and cost, no win no fee is a practical and efficient way of making justice available to all, especially to those who would not have been able to start the claims process in the first place without a no win no fee arrangement to cover the costs.

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