Everyone is familiar with the phrase ‘no win, no fee’. But what does it actually mean? Here is a quick guide to provide you with more information if you are considering entering into such an agreement with your solicitor
No Win, No Fee Overview
No win, no fee is the more common name given to Conditional Fee Agreements (CFAs). These were introduced in the UK in 1995, and consist of a special type of agreement that is made with a solicitor whereby if the claimant loses the case, they will not be responsible for paying their solicitor’s fees.
No win, no fee agreements have developed something of a bad reputation in some areas due to the dubious practices by some claims management companies. However, it is important to remember that CFAs are a good thing. Legal aid for personal injury claims was abolished by the government in April 2000, and CFAs allow many people to get access to justice where they may not have been able to afford it without such an agreement.
What Happens if You Win?
If you win your case, currently the solicitor will take their fee from the losing party and you will get to keep all of the compensation. This means that you do not lose out.
However, the losing party also has to pay for a number of other fees. These include the disbursements, which are expenses that you have had to pay including court fees and medial reports (although your solicitor may have paid these for you).
At the current time, the solicitor will often charge the losing party a fee known as a ‘success fee’ because of the risk that they took in taking on your case. In some cases the success fee can be up to 100% of their own costs, but this varies by solicitor.
Winning is really important in this case because most of the favor will go into your side. Hence, one of the keyways for you to have high chances of winning is to hire the best lawyer. El Cajon car accident lawyer is the best deal to consider.
Changes in April 2013
The rules surrounding success fees is set to change in April 2013 when the Legal Aid, Sentencing and Punishment of Offenders Act comes into effect. This will prevent solicitors from claiming success fees from the losing party, meaning you could have to pay your solicitor’s success fee out of your compensation, reducing the overall amount of compensation that you receive.
What Happens if You Lose?
If you lose your case, you will not have to pay for the fees of your solicitor. However, that does not mean that you will not have to pay any costs.
These costs could include the solicitor’s costs for the winning side, the success fee and the disbursements. These can sometimes cost thousands of pounds, so it is usually recommended that you purchase an insurance policy to cover you in case you lose.
ATE insurance stands for After the Event insurance. This is a type of insurance that you purchase to cover your costs in the event that you lose your case. If you lose, you will have to pay for the premium of your ATE insurance. If you win then the losing side currently pays the premium on top of the other expenses.
However, this is also set to change in April 2013 when new laws come into place preventing the winning side from charging the losing side for the premium, so this is something that you will have to pay as well even if you win.
As a result, general damages are set to be increased by 10% to make up for the fact that you will be paying extra for ATE and the success fee, so that you still get a fair level of compensation.
Always Find Out the Details Before Agreeing to Anything
Your solicitor should always explain everything to you in detail, including any expenses that you may be liable to make, before you agree to a no win, no fee arrangement. If you are ever in doubt then ask your solicitor, and if you do not feel like they are providing you with the full information, simply find another solicitor.
No win, no fee agreements are a useful way for you to get access to justice, but you should always be 100 percent clear about what is involved and the possible outcomes for you before you agree to anything.