In this article, we will explain what a No Win No Fee Agreement is and what questions you need to ask your solicitor before you sign one.
What is No Win No Fee
LawCat Definition: No Win No Fee (Proper legal name: Conditional Fee Agreement or Contingency Fee Agreement depending on which you use) is very straight forward. It means that if your claim is unsuccessful, you will not have to pay any legal costs.
This does not mean that you will pay nothing!
Before I go any further, I think it is a good idea to give you a brief rundown of how costs are calculated in most PI claims.
There are Three Elements:
- Base Costs: This is the hourly rate charged by firms. This will vary depending on what part of the country you are in and what grade the solicitor who is taking care of your case is.
- Success Fee: usually a percentage of your damages. This will not be higher than 25% of your compensation, and in some cases such as Road Traffic Accidents, it is fixed at 12.5%.It’s also worth noting that this percentage is negotiable, at your initial meeting have a chat with your solicitor to see if they would be willing to lower their success fee percentage.
- Disbursements: money the solicitor firm has had to spend to further your claim e.g. Court Fees, Payments to GP & Hospitals to purchase your medical records, etc
What Happens If You Lose Your Claim?
The legal costs (the Base Costs and the Success Fee) will not be paid by you if you are unsuccessful, but the disbursements will still be payable by you.
Most legal firms will protect you against paying these, as court fees especially can add up quickly. They will discuss insurance with you (Cat on the Blog – Why do I need Insurance?). Insurance, if in place, will cover the disbursements for you if you are unsuccessful. If the policy is self-insuring, then they will also cover the cost of the premium, so at the end of the day, you will pay nothing if you lose.
What Happens If You Win Your Claim?
You will only be expected to pay your fees if you win. But you will not have to pay all of them!
You will pay the Success Fee. The Defendant will be responsible for paying the Base Costs and Disbursements.
So if you agreed a 25% Success Fee and won £10,000.00 Compensation, you will pay £2,500.00 to your solicitor.
So if you were reasonably savvy and managed to negotiate with your solicitor to lower their Success Fee, this is where you will reap the benefits. You will be able to keep more of your compensation.
Are There Any Other Times When You May Be Asked To Pay Money To Your Solicitor When On A No Win No Fee
The short answer is yes.
However, this is not a definite occurrence and will depend entirely on your firm and your case. But you might be asked to pay some disbursements up front while your case is ongoing.
It may be your firm’s policy to request for payment on account of expenditures that they will then refund to you if your claim is successful. Or it may be that your firm has some concerns about your case and doesn’t want to risk paying for the disbursements for you.
Questions To Ask Your Solicitor At The initial Meeting
What is my percentage of success? (Solicitors have to give a percentage of success to insurers and barristers; they should estimate this before they take you on as a client).
Would you consider lowering your Success Fee percentage to 20%, 15%, 10%? (The higher your percentage of success the lower you can ask them to go as there is less risk involved for them).
What is your policy on Disbursements? Do I have to pay up front?
I have insurance on my car/house will this cover me for legal expenses (this way you can avoid a premium of you win your case).
Who will be doing the work on my case? (Just because you see the head of the department in your meeting does not mean they will be the only one working on your case).
A No Win No Fee Agreement does exactly as the name suggests, if your case is unsuccessful, you will not pay legal fees. However, if your claim is unsuccessful, you may be asked to pay disbursements if you or your solicitor has neglected to get insurance to cover this eventuality.