Understanding The “No Win No Fee” Personal Injury Agreement
In the UK, the majority of personal injury cases are funded through a conditional fee agreement known as a ‘no win, no fee’ policy. This applies for all kinds of personal injury claims, from clinical negligence to road traffic accidents. If the financial implications of securing legal representation to help you get compensation for an injury concern you, then this agreement could be a good way to lessen the risk of making a claim.
What is ‘no win, no fee’?
Putting ‘no win, no fee’ policies into the simplest terms, they are essentially an agreement made between a personal injury solicitor and their client regarding the cost of legal representation. As the name suggests, the agreement stipulates that if your solicitor cannot win your case for you, you don’t have to pay them for their services. If they do win the case, there is a fee – however this is usually paid via the defendant’s insurance company.
Generally speaking, a ‘no win, no fee’ agreement can be a good way to separate the reputable solicitors from those who might be a waste of your time and money. No lawyer should take on your case unless they have reason to believe they have a good chance of winning it – making the ‘no win, no fee’ agreement less of a risk for them.
How does a ‘no win, no fee’ claim work?
Before taking on a ‘no win, no fee’ case, your personal injury solicitor will thoroughly review all the relevant information available to them so they can assess how likely they are to win the claim. If they believe they stand a good chance of success, they’ll take your case and begin the process of making a personal injury claim on your behalf – and you won’t pay anything upfront.
If you make a ‘no win, no fee’ claim, your personal injury solicitor may advise taking out an insurance policy known as ‘after the event insurance’ (ATE insurance) on your behalf which covers any costs of running the case such as expert reports in the event of an unsuccessful claim.
What happens if my ‘no win, no fee’ claim is successful?
Great news! Your personal injury claim was successful. Although you probably want to celebrate this win, you’ll also want to know what this means for you financially. As you might expect, winning your personal injury case means that your solicitor will need to be paid for their services – however, this fee is paid by the defendant as part of the case settlement.
That doesn’t mean you pay nothing at all, though. Firstly, you’ll likely need to pay the premium for your ATE insurance if your solicitor advised you to take this out. Your solicitor should have made this fee clear to you from the beginning when you initially agreed to the ‘no win, no fee’ deal, so the size of the premium shouldn’t come as a surprise to you. Then, you’ll also need to pay your solicitor’s success fee.
A ‘no win, no fee’ agreement is naturally something of a risk for solicitors since if they don’t win the case, they don’t get paid. A success fee is an amount written into the contract that they will take from your compensation if and only if the claim is successful, and it’s designed to cover their general expenses and time. This ensures that they’re paid fairly for their services. In England and Wales, the success fee is capped at a maximum of 25% of your total compensation figure, meaning you’re guaranteed to receive at least 75% of your compensation. Again, the exact percentage your solicitor wants will be discussed and agreed with you prior to officially engaging their services.
What happens if my ‘no win, no fee’ claim is unsuccessful?
If your solicitor cannot win your claim for you, then you don’t have to pay for their services. No success means no success fee – so neither you nor your solicitor will receive compensation funds.
However, the cost of the expert reports such as a medical report and/or engineers report may still need to be paid. Your solicitor will advise you how this will be funded at the outset of the case and this may involve taking out an ATE policy.
In the event of an unsuccessful outcome, that policy pays out funds to cover off any fees payable by you, including the premium for the policy itself. So, while technically the money is paid out to you and then used to pay various fees, in real terms you don’t gain anything and you don’t lose anything either.
Because of the risk of not getting paid if the case is unsuccessful, your solicitor will only take on your case if they think you have a reasonable chance of winning. This means that before they agree to work with you, they’ll examine the information you provide them with to determine whether or not your claim is viable – and if it isn’t, they’ll let you know when telling you why they can’t take the case. It can be tempting to try to get any lawyer willing to take your case – but remember, any solicitor who wants to be paid upfront will get paid regardless of how your case goes, so you could end up out of pocket.