Some solicitors offer their services on a “no win, no fee” basis. You may also see this referred to as a “conditional fees” arrangement. Before you enter into a “no win, no fee” agreement, it is important that you understand what this entails.
In a “no win, no fee” arrangement, your solicitor agrees that you will not have to pay their basic fees if they are unsuccessful in winning the claim for you. The arrangement that you make will set out what you have to pay if they are successful in winning the case for you. In most cases, they will take a pre-arranged percentage of your award as their “success fee” and the defendant in the case will have to pay their legal fees as part of your compensation award.
You should make sure that you understand the terms of the agreement before you continue with the case, because you may be stung by a nasty surprise if they take more than you were expecting. It is also important that you know what will happen if you fail to follow their legal advice or pull out of the claim before the end of the process. You may end up having to pay their fees in these circumstances.
When Can a No Win, No Fee agreement be used?
“No win, no fee” agreements are normally only made in compensation claims. Other types of civil case are not well suited to the use of “no win, no fee” arrangements.
Change in Law
“No win, no fee” agreements used to be very widely used, however changes to the law mean that they are not as common as they used to be. In the past, the success fee was footed by the losing side, but the rules change means that the success fee now comes out of the compensation which is awarded.
When the success fees were footed by the losing side, claims solicitors were able to charge a disproportionate amount, which sent costs skyrocketing and increased the number of claims which were made each year. To protect claimants, the success fee has been capped at 25% of the total damages. These changes were introduced to help to reduce the “compensation culture” which was developing in the United Kingdom, which included many people launching spurious claims. “No win, No Fee” arrangements are now less lucrative for solicitors.
Can there be Hidden Charges?
Although claimants may not be expected to pay their solicitors fees if they do not succeed in winning the case, they can actually be landed with a lot of other hidden charges. If they lose, they may be expected to pay the opposing party’s legal fees to cover their costs for the case. It may be possible to take out insurance to protect against this if you are making a claim.
You may also be expected to cover additional costs which are associated with the legal process. This can include; report fees, travel expenses; court fees; official search fees and much more. If your solicitor or claims advisor needs to hire a barrister to represent you in court, then you’ll also be expected to pay their fees.
It is also worth considering what you are likely going to have to pay as a success fee at the end of the process. If you receive a high compensation award, then the success fee could end up being thousands of pounds. Although this may save you money in the first instance, you may actually end up “spending” less if you simply use a good solicitor with a low fixed rate cost instead.