No Win No Fee agreements are commonly used in the UK to help people pursue legal claims without paying upfront legal fees. These arrangements are formally known as Conditional Fee Agreements (CFAs) and are most often seen in personal injury and compensation claims. The aim is to reduce the financial risk involved in taking legal action.
This article explains what No Win No Fee agreements are, how they work, and what to expect before entering into one.
What Is a No Win No Fee Agreement?
A No Win No Fee agreement is a legal funding arrangement between a solicitor and a client. Under this agreement, the solicitor agrees to handle the case without charging legal fees at the start. Legal fees are only payable if the case is successful.
If the claim does not succeed, the client usually does not have to pay the solicitor’s legal fees. This makes the agreement particularly useful for individuals who may not be able to afford private legal costs.
In the UK, No Win No Fee agreements are governed by the Courts and Legal Services Act 1990 and subsequent regulations to ensure fairness and transparency.
How Does a No Win No Fee Agreement Work?
Once a solicitor agrees to take on a case under a No Win No Fee arrangement, a written agreement is signed. This document sets out the terms, including what happens if the case is won or lost.
The solicitor will assess the strength of the claim before agreeing to proceed. This assessment is important because the solicitor takes on financial risk if the case fails.
If the case is successful, the solicitor is paid through:
- Legal costs recovered from the opposing party, and
- A success fee deducted from the compensation.
If the case is unsuccessful, the solicitor usually does not charge for their time.
When Can a No Win No Fee Agreement Be Used?
No Win No Fee agreements are commonly used in:
- Personal injury claims
- Road traffic accident claims
- Medical negligence cases
- Workplace accident claims
- Slip and trip accidents
- Professional negligence claims
They are less common in family law or criminal cases, where different funding arrangements apply.
What Happens If the Case Is Won?
If the case is successful, compensation is awarded. From this:
- The solicitor recovers standard legal costs from the losing party.
- A success fee may be deducted from the compensation.
The success fee is a percentage of the compensation and is agreed in advance. In most personal injury cases, this fee is capped by law to protect the claimant.
The client receives the remaining compensation after deductions.
What Happens If the Case Is Lost?
If the claim is unsuccessful, the client usually does not have to pay the solicitor’s legal fees. This is the key benefit of a No Win No Fee agreement.
However, there may still be other costs involved, such as:
- Court fees
- Expert witness fees
- The opponent’s legal costs
To cover these risks, solicitors often recommend After the Event (ATE) insurance, which protects against paying these additional expenses.
What Is a Success Fee?
A success fee is an additional fee paid to the solicitor if the case is won. It compensates the solicitor for the risk of not being paid if the case fails.
In the UK:
- The success fee is capped at 25% of the compensation for most personal injury claims.
- The percentage must be clearly stated in the agreement.
- The fee cannot be charged if the case is lost.
This legal cap ensures that claimants retain the majority of their compensation.
Are There Any Risks with No Win No Fee Agreements?
While No Win No Fee agreements reduce financial risk, they are not completely risk-free. Potential issues include:
- A portion of compensation being deducted as a success fee
- Insurance premiums that may not be recoverable
- Strict terms that must be followed during the case
Reading the agreement carefully and understanding all potential costs is essential before signing.
How to Choose a No Win No Fee Solicitor
Choosing the right solicitor is important. Consider the following:
- Experience in handling similar claims
- Clear explanation of fees and deductions
- Transparency about risks and timelines
- Proper regulation by the Solicitors Regulation Authority (SRA)
A reputable solicitor will explain the agreement in plain language and answer any concerns before proceeding.
Frequently Asked Questions
Is No Win No Fee really free?
Legal fees are not paid upfront, but a success fee may be deducted from compensation if the case is won.
Can a solicitor refuse a No Win No Fee case?
Yes. Solicitors may decline cases with low chances of success due to the financial risk involved.
Can the agreement be cancelled?
Most agreements allow cancellation within a cooling-off period, but charges may apply if cancelled later.
Conclusion
No Win No Fee agreements play an important role in the UK legal system by improving access to justice. They allow individuals to pursue valid claims without the fear of high upfront legal costs. While they offer significant financial protection, it is essential to understand the terms, success fees, and potential risks involved. Reading the agreement carefully and choosing an experienced solicitor ensures that the arrangement works as intended.