guide to no win no fee claim

Taking legal action can be expensive as well as stressful. If you have a problem or dispute with someone, you should first talk to your solicitor or adviser to consider the various ways of dealing with the problem. For example, there are conciliation and mediation services, which can be simpler than using the courts for sorting out disputes. See the Community Legal Service Direct leaflet ‘Alternatives to court’ for more information.

However, if you do find that you may need to use a solicitor, you should think about how you will pay for your case.

You may be able to get public funding through the Community Legal Service Fund (formerly called legal aid) to help pay for some cases. You can get this help only if you genuinely cannot afford to pay by yourself and only for certain types of case. The main type of case for which you cannot get public funding is a claim for a personal injury. For more information, contact The Community Legal Service.

If you do not qualify for money from the Community Legal Service Fund, there are other options to help you pay.

One of the main ways is to use a ‘conditional-fee agreement’, also called a ‘no-win, no-fee’ agreement.

A ‘no-win, no-fee’ agreement can help you pay your solicitor’s costs, unless your case relates to a family dispute or it is a criminal matter.

Alternatively, you may already have legal-expenses insurance (as part of some other insurance policy), which will cover your costs (see Before-the-event insurance).

Under a ‘no-win, no-fee’ agreement, your solicitor will take on your case on the understanding that if you lose your case, they will not get paid. But it is important to remember that there is more to the costs of a legal case than your solicitor’s fees. And if you lose your case, you may still have to pay:

However, you can (and you should) buy insurance to cover these payments in case you lose. Your solicitor will try to arrange this for you at the start of the case and will tell you if they cannot find an insurer willing to cover you.

If you win your case, you must pay your solicitor’s fees as well as their disbursements. But you should be able to get these costs (or most of them) paid by your opponents.

Your solicitor may also charge a ‘success fee’. This is meant to compensate the solicitor for the risk of not being paid (if you lose). It may also cover the delay in getting paid (the time between starting work on your case and receiving a fee if you win).

The amount of the success fee depends on your chances of winning your case. The riskier your case, the higher the success fee is likely to be. In most types of road-traffic case resolved without a trial the amount of the success fee can be no more than 12.5 per cent of the solicitor’s normal fee. In other cases, if there is a trial, the success fee will usually be twice the solicitor’s normal fee.

If you win, the court will usually order your opponents to pay most (or sometimes all) of your solicitor’s fees, disbursements (including the insurance premium) and that part of the success fee which covers risk rather than delay, as long as the court thinks these costs are reasonable. Any part of the success fee not covered by the court’s order will have to come out of the damages (compensation) you are awarded.

It is important to get a written estimate of all the likely costs from your solicitor before they start to work on your case even though you may not have to pay these costs under a ‘no-win, no-fee’ agreement.

Remember that a ‘no-win, no-fee’ agreement removes some of the uncertainty and financial risk of taking legal action, but it doesn’t remove all of it. And remember that at this stage you are getting only an estimate. The final cost may be higher if, for example, the case takes longer than expected.

The Law Society, the professional organisation for all solicitors in England and Wales, has a model conditional-fee (no-win, no-fee) agreement, which many solicitors use as a basis for their own agreement for their clients. Solicitors’ professional regulations say that your solicitor must explain their agreement to you.

However, your opponent will be ordered to pay most, if not all, of these charges.

expenses, such as court fees, disbursements and expert-witness fees;
your opponent’s legal fees, including their solicitor’s basic charges and success fee (if there is one), and any insurance premium they have paid; and
your opponent’s disbursements (for example, expert’s fees).

In most cases, your solicitor will advise you to take out insurance. They may offer you insurance, for example, through the Accident Line Protect scheme, which is endorsed by the Law Society. Other insurance policies are available, and you are free to arrange insurance yourself if you want to, although it is much easier (and probably cheaper) if your solicitor does it.

If you win you will have to pay the success fee. But you should be able to get a large part of it, and the insurance premium, back from your opponent.

There are two basic types of legal expenses insurance. They are called ‘after-the-event’ and ‘before-the-event’ insurance and they work in different ways.

An after-the-event policy is for when you are already in a dispute, and you need to cover your disbursements and the risk of having to pay the other side’s legal bill if you lose your case.

A before-the-event policy is usually sold with other insurance (for example, car insurance or house insurance).You cannot generally buy it to cover you for a problem you already have. If you have this kind of insurance to cover your legal costs, you may not need to enter into a conditional-fee agreement.

Before-the-event insurance pays your costs only if your insurance company thinks you have a good chance of winning your case. The insurance will usually pay for:

However, it won’t cover any compensation you are ordered to pay if you lose your case.

Also, before-the-event insurance does not cover you for all types of legal problem and your insurer will not necessarily take your case on, which is why it is important to get advice.

If you want to use this type of insurance to cover your legal costs, you need to be aware of several conditions:

In most cases, you must report the incident that your case is about within six months of it happening, though this time limit is shorter with some policies.
Most policies say you can choose your own solicitor, but only after legal proceedings have started. At any earlier stage the insurance company can refuse your choice of solicitor without giving any reason. Your solicitor will advise you what you can do to persuade the insurance company to allow you to use the policy and choose who will act for you. If it refuses, your solicitor may still be able to act for you under a ‘no-win, no-fee’ agreement.
Most policies say that once the case has started you must accept any reasonable offer from your opponent to settle. If you don’t accept an offer, you may no longer be covered by the insurance, and if you wish to continue with your case you will have to make other arrangements to pay the costs from that point.
There may well be a limit on the amount of legal expenses that the policy will cover (for example, £25,000). If you reach that limit (which might be for both your and your opponent’s costs) and your case has not yet finished, you may have to pay out of your own pocket to finish the case. Alternatively, you may be able to increase the limit by paying an extra premium.

If you have home contents insurance or credit card insurance, you can often buy legal-expenses insurance as an ‘add-on’ or it may be included with your policy. If you have to pay for it, it should cost you between £10 and £50 a year. Your policy with the add-on will usually cover you for:

personal injury (if you or a family member are injured or killed due to someone else’s negligence);
employment issues (for example, if you are dismissed unfairly, or injured at work);
a consumer problem relating to a contract to buy or hire goods and services;
loss or damage to your property that was someone else’s fault;
disagreements with neighbours about things like boundaries or noise;
tenancy disputes if you live in a rented house or flat; and
contract problems with buying or selling a house or with nonstructural building work (redecoration, for example).

But you should always check first whether the insurance will cover any problem you want to take legal action over.

Most trade unions offer free legal assistance for certain (mainly work related) disputes. However, trade unions are increasing their non-work related legal services, so it is worth talking to your union representative to see if the union could help pay for any type of legal case. Many trade unions offer legal services to a member’s husband or wife, partner and other close relatives as well as to the member.

Basic or normal charges - The hourly rate that most solicitors charge to do your legal work.

Conditional-fee agreement - A way of paying for your case, also known as ‘no-win, no-fee’.

Community Legal Service Fund What used to be called legal aid. This is a fund of government money to help people pay in certain circumstances who can’t afford to pay for a legal case themselves.

Damages or compensation - The money you win, either in court or from settling out of court.

Disbursements - Payments made by the solicitor to other people on your behalf. They may include court fees, accident-report fees or expert witnesses’ fees, as well as paying for a barrister to argue your case if it goes to court.

Legal-expenses insurance - Insurance taken out to protect against legal costs that result from going to court.

Lose - When the court dismisses your claim or you stop the claim without receiving any benefit.

Success fee - The amount that your solicitor will add to your bill if you win your claim. If you win, you should be able to get a large part of this paid by the losing party.