No Win, No Fee
Before “no win, no fee” agreements were introduced, the public were polled to determine whether they would generally be happy to pursue their legal cases where their lawyer received 25% of their claim provided they still received 75% of the compensation – most members of the public polled said that this would be acceptable.
Updates From 1st April 2013
On 1 April 2013, the law changed so that solicitors’ costs are now more like this contingency arrangement, similar to the American legal system as we know it. There, when the case is finished, the winner has to pay his lawyer from the money or compensation he is awarded, but the awards are much higher. American lawyers often take 40% of the compensation. Here, a client will now have to pay for his lawyer’s success fee and any insurance to cover his claim, but the contribution is limited to 25%.
Before 1st April 2013
After “no win, no fee” agreements were introduced by the Labour government in April 1999, the loser still had to pay the winner’s legal fees, and the claimant would be able to litigate at no cost to himself, knowing he would not have to pay his lawyer if the case was lost. However, the client was still liable for his own disbursements (expenses paid by his lawyers, such as a medical report fee) plus his opponent’s legal fees if he lost, but his lawyers took out insurance cover for him, so the client was still able to proceed at no cost. Not any more.
“No win, no fee” agreements are no longer free to clients. The Conservative government has reverted to a system which means the loser no longer has to pay most of the client’s legal fees but not all and not the client’s insurance cover, taken out to protect him if he loses. Accordingly, the government decided these costs have to be borne by clients. In brief, this means a client now has to pay 25% of their compensation as the part of the lawyer’s fees of the case, and that is the maximum – it cannot be more than 25%. But there is good news. The government has ordered higher compensation to be paid.
Why has the System been Changed?
The Conservative government has determined the public are fed up with car insurance premiums continuing to rise and fraudulent claimants bringing claims for compensation when the accident has occurred falsely, or the nature of the injury has been exaggerated. Some people involved in accidents make the car damage worse so they can claim for higher compensation, and the public are also fed up with being hounded by accident claims companies harassing people to bring claims, offering cash as a bribe. The whole industry is fed by greed. If the fees charged by accident management companies had been kept at a reasonable amount, these changes may not have occurred.
So, should the client proceed with his case without insurance? No.
This is because there are circumstances when the other side might be entitled to all of their legal costs, such as after a reasonable offer has been refused or after the client has lost his case; without insurance, the client will personally have to pay for all of those legal fees, whether £5,000 or £25,000 or more, from his own pocket.
The insurance will also cover the cost of your own disbursements in the case, such as court fees, medical expenses, barristers fees, etc, which you are responsible for, as it is your case, not your lawyer’s – it is not up the lawyer to pay for your case, although he may finance it for you until the end of the case.
So, in summary, you can either sign a new “no win, no fee” agreement (agreeing to a 25% deduction with case insurance) or pay your lawyer as you go along. The choice is yours.