What is a ‘no win, no fee’ agreement
The expression ‘no win, no fee’ is often used in personal injury cases. It is used as a way of funding a compensation case where the accident victim does not have the means to pay the costs involved as the case progresses.
If we feel your case has good prospects of success, we will usually agree to proceed with your case under a ‘no win, no fee’ agreement. The ‘No Win No Fee’ Agreement is another name for a Conditional Fee Agreement (CFA). One of the most important features of a ‘No Win No Fee’ Agreement is that if you do not succeed in your claim, then you will not be liable to this firm for our fees.
The ‘no win, no fee’ agreement
In a Court case without a no win, no fee agreement the loser normally pays the costs of the winner in addition to their own costs, subject to certain rules known as ‘qualified one way costs shifting’. Typical terms of the ‘no win, no fee’ agreement are as follows:
- In ‘no win, no fee’ cases, we agree not to charge a fee unless the action is successful
- In no win, no fee cases costs risks may be limited to paying the other side’s costs if you lose, this being usually limited to the amount of your damages, plus any ‘disbursements’ (such as the cost of expert witness reports) & Court costs
- You can, however, buy insurance to cover these costs and we generally recommend that you do so
What is “after the event insurance”?
Although you might not have to pay our firm’s fees if you lose, you may be personally responsible for payment of your opponent’s costs and expenses. For this reason we always try to offer the ‘No Win No Fee’ Agreement in conjunction with an insurance policy so that you will not incur personal liability for your opponent’s costs should the claim fail. This means that you will not have to pay any fees if you lose and you will therefore be able to pursue your claim with a considerable degree of security.
This insurance policy is known as after the event insurance. If you lose, the insurance premium may be self-funding and may pay for itself. If however, your claim is successful, you will be responsible for the payment of the insurance premium and the same would be deducted from your final compensation.
We can assist with arrangements for this type of insurance and advise you on how much cover it provides you against your opponent’s costs. If you require information on the insurance available and the cost of that insurance, please contact your file handler for more information.
The success fee
Running a legal action on a ‘no win, no fee’ basis with costs insurance means we are taking the largest financial risk. In ‘no win, no fee’ cases, if you lose we don’t get paid, but the insurance will cover any exposure to the other side’s costs and your own disbursements. As a result of this risk, we will charge a ‘success fee’:
- The success fee is capped at 25% of your damages. For example, if your claim settled for £4,000, we would deduct £1,000 from your final compensation
- You will be expected to pay the success fee from your compensation
- No success fee is payable in the event of an unsuccessful outcome
Will I have to pay out any monies before the conclusion of the claim?
We will normally take the risk and make all necessary payments on your behalf. We may on occasion ask you to pay for disbursements as your claim proceeds. In a claim for personal injuries, disbursements are likely to include but are not limited to the following expenses:
- GP and Hospital Records
- Experts Medical Report
- Counsel’s fees
- Court fees
These expenses should be recovered from your opponent in the event of a successful outcome of the claim. In the event of an unsuccessful outcome, these disbursements may be covered by the insurance policy taken out in your name.
The circumstances in which you may have to pay our fees
There are instances where you may be responsible for our fees. For example:
- In the unlikely event that you should wish to end the ‘No Win No Fee’ Agreement, you will have an obligation to pay our basic costs, unless we agree to await the outcome of your claim
- In the event you fail to provide us with instructions or fail to co-operate with us in any way, we would hold you to be in breach of the ‘no win, no fee’ agreement
- You may also be responsible for some of our fees if you win. This situation may arise if we cannot recover all of our costs from the opponent. However, in the event of a successful outcome, we would hope you will recover most if not all of our costs from your opponent
If you need any further guidance or information as to how your case will be funded, please contact us and we will be happy to explain the funding options to you.