2013 Changes to No Win No Fee Agreements

“No win, no fee” is one of those phrases which all of us hear on an almost daily basis. These sorts of agreements, informally known as” no win no fee” but officially called Conditional Fee Arrangements (or CFA), were introduced as a way to enable people who could not afford to pay legal fees up front to pursue a claim for compensation. When conditional fees were first introduced in 1995, they were seen as a way to allow everyone access to justice, irrespective of their financial situation.

Solicitors offer conditional fee arrangements for a number of different areas of accident and injury which may result in a compensation claims such as road traffic accidents, criminal injury, professional and in particular medical negligence and work-related accidents including industrial disease. A claim can only be made when the individual has suffered either an injury or some sort of financial loss as a result of the action of someone else, and through no fault of their own. No win no fee agreements do exactly as the name suggests: if the solicitor or legal firm you have chosen to represent you doesn’t win your case, you don’t have to pay them anything. This basic concept of the agreement has not changed since the system was introduced in 1995, but over the years since 1995 the system has been tweaked in several different ways.

In 1995 when no win no fee claims were first introduced, a solicitor who failed to win the case was paid nothing at all. If they won though, the solicitor would take a percentage of whatever compensation was awarded as their fee. In 1999 this was changed in the Access to Justice Act, which stated that the solicitors’ fees should be paid by whichever side lost. This meant that if you agreed a no win no fee agreement with your solicitor, you would still have to pay their costs if you lost. Normally, this was covered by a special insurance policy which covered the risk of the claim not being successful.

No win no fee – the latest changes

Most recently, in April 2014, there were more changes made regarding who pays the costs when a case is successful or unsuccessful. The changes mean that solicitors now have the right to charge a “success fee” if they win a claim, in return for the risk that they carry of not being paid if the case is unsuccessful. The solicitor’s success fee is taken as a percentage of the compensation which is awarded to their client, but is capped at 25% and is paid by the person who makes the compensation claim successfully and wins. This means that solicitors can still advertise “no win no fee”, but will no longer be able to say that their clients will get 100% of any compensation they are awarded. If you lose your claim, no compensation will be due to you, but an “after the event” insurance policy will mean that will not have to pay any legal fees either.

This is all quite complicated, so if you feel you need more in-depth or advice or guidance about the no win, no fee process and the changes which affect how it works, get in touch with one of our compensation claims team who will explain to you in simple terms how this method of charging could help you claim the compensation you deserve. They will be able to give you specific advice on how the changes affect your particular case, and will be able to tell you what the consequences would be for you in the event of winning or losing.

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