A “no win, no fee” or “conditional fee” agreement is an option for those who cannot secure legal aid for themselves or do not have an insurance policy to cover their claim in the event of an accident that is no fault of their own.
All the terms of the agreement, both in general and specific to your case, are set out in writing at the beginning, including the success fee (see below). Make sure you have a full understanding of the terms before proceeding, and never hesitate to ask questions.
Risk and reward – paying the winner’s fee
It means that if you lose the case, you will not have to pay your solicitor’s fees, though you will still have to cover the costs of the other side – these are known as disbursements and will often include fees they owe the police and medical services.
Insurance
It is highly recommended that you take out an insurance policy known as ‘after-the-event’ insurance in case of this. In some cases, the solicitor will be prepared to cover the insurance costs, though not always. Conditional fee insurance will cover the sum of your opponent’s and solicitor’s costs up to the first £100,000.
After-the-event insurance can, unfortunately, be very expensive, and you will not get the cost back if you lose. If you win, the other side may have to cover part of it but you may have to give up some of your compensation if the court rules the cost is too high (see Basic fees, below).
If you cannot find a provider confident enough in your chances to insure you, you should think carefully about your claim and how much you are prepared to risk. A conditional fee agreement is not the only way of paying your solicitor.
Basic fees
You will not have to pay basic fees if you lose the case, and the other side will cover them if you win. If you win the case but your opponent feels they can only reimburse part of your costs – which may happen in the case of after-the-event insurance – you may have to make up the difference out of your award.
Success fee
If you win the case, provisional rules will allow your solicitor to charge a higher fee than if you had lost. The details of this are established in the written agreement, and your lawyer is obliged to inform you how their particular fee will be calculated and how they would like it to be paid.
Sometimes they will agree to charge only you what can get from the other side, sometimes not. What you recieve from the other side should cover much of this, leaving you with most if not all of your award. The Law Society recommends a success fee of 25 per cent of the award at the absolute maximum, and generally it will be less.
Barrister’s fee
If your case goes to court, you may need a barrister to represent you as well as your solicitor.
Further expenses
The following will not necessarily be included in the ‘no win, no fee’ agreement, and they can add up to a considerable cost.
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Accident report fees,
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Court fees
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Experts’ fees
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Official searches
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Travelling expenses.
Hidden costs
You must always be very cautious of hidden costs, which can be incurred if you do any of the following:
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You ignore what your solicitor thinks would be the wisest approach, whether that is to:
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Drop the case
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Settle out of court
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Go to court
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You refuse to co-operate with your solicitor in some other way
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The other side is ordered to pay costs but can’t afford to (see above).
If your solicitor suggests you drop the case and you carry on with a new solicitor, you may have to pay success fees to both solicitors if you manage to win the case.