No Win No Fee Injury Compensation
A Guide to No Win No Fee Injury Compensation
“No Win No Fee” injury compensation was first made available by solicitors in 1995 after the decision was made by the Government to abolish Legal Aid for certain types of personal injury claims. Inasmuch as the decision to remove Legal Aid was unpopular with some and consequently not implemented until 2000, the Legal Aid scheme had become selective and expensive to maintain – with attributed solicitors only accepting cases in the areas of law with which they were familiar.
The lack of affordable, non-selective representation and the necessity for claimants to contribute towards their legal fees from compensation settlements meant that the Legal Aid system no longer served the requirements of those who were most in need of legal assistance. “No Win, No Fee” injury compensation claims filled that gap, and have since expanded their reach to become the most popular way of pursuing a claim for personal injury compensation in the UK.
We have compiled this guide to “No Win, No Fee” injury compensation in a question and answer format according to some of the most frequently asked questions received by solicitors. If you have any questions about “No Win, No Fee” injury compensation which are not covered on this page, or would like answers expanded or explained in greater depth, you should speak with a UK personal injury compensation solicitor offering “No Win, No Fee” legal representation.
What Does “No Win, No Fee” Actually Mean?
“No Win, No Fee” arrangements are conditional agreements made between a solicitor and a claimant which state that a claimant is not liable for the legal fees of their solicitor should the “No Win, No Fee” solicitor fail to resolve the claim successfully. What the headline “No Win, No Fee” omits to say is that a claimant could still be responsible for any expenses that the solicitor has incurred on the claimant´s behalf and the legal expenses of the defendant against whom the claim was made.
Depending on the nature of the “No Win, No Fee” injury compensation claim, the disbursements, medical report costs and court fees could add up to a considerable amount. Add the defendant´s legal fees into the equation, and the total amount owed for bringing an unsuccessful personal injury claim could potentially run into tens of thousands of pounds.
Is There Protection Against “No Win, No Fee” Liabilities?
Not all “No Win, No Fee” solicitors charge for disbursements when a claimant is making a claim for personal injury compensation under a “No Win, No Fee” agreement, and inasmuch as it is advisable to ask a solicitor their terms and conditions in relation to “No Win, No Fee” personal injury claims before engaging their services, most will offer “After the Event” insurance to protect the claimant against potential liabilities.
No matter how strong a claim for personal injury compensation is, there is always the risk that if a claim goes to court a judge can find in favour of the defendant. These “After the Event” insurance policies insure against a freak result, and protect the claimant against financial liability. Although the premium payable on “After the Event” insurance cannot be recovered from the negligent party if your claim is successful, the protection provided by the insurance policy can prevent a significant amount of stress during what is already likely to be a particularly stressful period of your life.
How Much Does “No Win, No Fee” Representation Cost?
The costs incurred in a “No Win, No Fee” injury compensation claim are going to depend on the outcome of the claim and the solicitor´s terms for handling the case.
- Should the claim be unsuccessful, a claimant will not be responsible for their solicitor´s legal fees, but could be liable for disbursements, expenses, the defendant´s legal costs and/or the cost of insuring against such an event.
- Should the claim be successful, the solicitor´s legal fees, disbursements and most expenses are paid by the defendant, but not the premium for the “After the Event” insurance or your solicitor´s “Success Fee”. (1)
(1) Recipients of certain State benefits will also have a deduction made from the final compensation settlement to account for the benefits they have received since an injury was sustained. The defendant or their insurers deduct this amount from the final compensation settlement and sends it to the Compensation Recovery Unit of the Department for Work and Pensions.
What is a “No Win, No Fee” Success Fee?
Success fees are charged by “No Win, No Fee” solicitors when they are successful in a personal injury compensation claim undertaken on a “No Win, No Fee” arrangement. As the solicitor assumes the risk of preparing and presenting a claim without reward, a success fee is charged (to the claimant) when a successful conclusion has been achieved.
This success fee is usually a percentage of the solicitor´s charge for legal services. In England, Wales and Northern Ireland the percentage can be as much as 100 percent of the solicitor´s legal fees but is more usually between 20 and 25 percent. In Scotland it is not legal to charge a success fee, but under the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990, the amount of the solicitor´s legal fees can be increased by a pre-agreed percentage.
Qualifying for “No Win, No Fee” Representation
In order for a solicitor to accept “No Win, No Fee” claims for compensation, there has to be a fairly strong likelihood of success. Each personal injury claim is assessed on its merits and, generally speaking, if it is considered to have a better than 75 percent probability of success, “No Win, No Fee” legal representation will be offered to the client. No claim has a 100 percent likelihood of success and the acceptance of a claim under a “No Win, No Fee” agreement does not guarantee that the claim will be successful.
Issues which will be taken into account when considering a “No Win, No Fee” arrangement include the extent and severity of the injury, whether a third party was totally responsible for causing the injury, whether more than one third party was responsible for causing the injury and how much compensation is likely to be awarded or negotiated when the claim is successfully resolved.
Are There Other Means of Funding a Personal Injury Claim?
Claims for compensation which have a significantly lower probability of success will not be undertaken by solicitors on a “No Win, No Fee” agreement. However, this does not mean that there is no possibility at all of success and a solicitor will assist the claimant to fund their personal injury claim from other sources.
Legal Aid is still available for certain types of personal injury claims – most notably claims for clinical negligence, those against social services for failing to care for an elderly relative and some claims for faulty goods compensation. However, pursuing a claim for compensation via the Legal Aid scheme will mean that a claimant has to pay back up to 25% of their compensation settlement to fund the Legal Aid service.
“Before the Event” legal expenses insurance is normally attached to car insurance and home contents insurance policies and, depending on the nature of the policy, may cover a considerable amount of legal fees and costs. The issues with “Before the Event” insurance are that a claimant may only have a certain time frame in which to make a legal expenses claim (usually six months) and the insurance company may insist on the acceptance of the first “reasonable” offer of compensation.
Using the claimant´s own money to fund a personal injury claim may seem a little impractical if a solicitor has already rejected the possibility of “No Win, No Fee” representation, but it has been known. It is important to note that if a solicitor considers a claim to have little likelihood of success, an insurance company offering “After the Event” insurance may also decline the claimant – thus exposing the claimant to the risk of being liable for the defendant´s legal costs as well as their own.
What is the Difference between Conditional Fee Agreements and “No Win, No Fee” Agreements?
Conditional Fee Agreements (CFAs) and “No Win, No Fee” claims for compensation are exactly the same thing. CFAs were introduced in the Courts and Legal Services Act 1990 as a precursor to the removal of Legal Aid for most types of personal injury claims to enable those who could not afford the expense of engaging a solicitor the means to fund legal proceedings in personal injury compensation claims.
“No Win, No Fee” injury compensation only became a popular alternative term once television advertising and media marketing was exploited by claims management companies. Much of the advertising by these claims management companies was misleading and gave the impression that a claimant only had to pick up the phone to receive a cheque in the post.
Although Conditional Fee Agreements is not such a “trip-off-the-tongue” term, it more accurately describes a “No Win, No Fee” arrangement.
Where Can I Get Further Advice on “No Win, No Fee” Injury Compensation Claims?
Most personal injury solicitors offer representation for “No Win, No Fee” personal injury claims and will be able to provide helpful and practical advice on making a personal injury claim under a “No Win, No Fee” agreement. Indeed, as no two claims for personal injury compensation are identical, it is in a claimant´s best interest to discuss the circumstances of their injury with a personal injury solicitor at the earliest possible opportunity to confirm their eligibility to “No Win, No Fee” legal representation.