No Win No Fee Employment Solicitors
Understanding No Win No Fee
In the UK, “No Win No Fee” typically refers to Conditional Fee Agreements (CFA) between solicitors and their clients. CFAs generally enable individuals with limited financial means to undertake litigation, allowing them to compensate their solicitor from the proceeds of a successful case outcome. Should the case be lost, the client is usually only responsible for paying disbursements, though they may be liable for the opponent’s legal fees and disbursements. To mitigate this risk, clients can opt for “After the Event” (ATE) insurance. The costs of this insurance and any disbursements can often be claimed as part of the compensation. CFAs are not permitted in family law and criminal cases.
No Win No Fee Cost Components
Understanding the cost components associated with a No Win No Fee Agreement is crucial:
- Basic Charges or Standard Fee: This is the fee for the legal services provided, usually calculated based on the time spent on the case and the hourly rates of the staff involved.
- Disbursements: These are expenses incurred on behalf of the client, which may include court fees, expert witness fees, accident report fees, and travel expenses.
- Success Fee or “Uplift”: To offset the risk of taking on cases that may not result in victory, solicitors can include a success fee in the CFA. This is an additional charge, capped at 100% of the solicitor’s basic fees, added to the bill if the case is won, with the intention of recovering this cost from the opposing party.
- After the Event (ATE) Insurance Premium: This is the insurance cost under a No Win No Fee arrangement, designed to cover potential legal costs and disbursements should the case be unsuccessful. It is typically arranged at or after the commencement of litigation.
Making a Claim With a No Win No Fee Agreement
- The financial burden on the client is contingent upon the case’s outcome, meaning in the event of an unsuccessful case, the client may face minimal to no costs.
- Disclosing the Conditional Fee Agreement (CFA) to the opposing party can prompt an earlier settlement, as the opposing party’s costs will escalate with the success fee level.
- The client’s awarded damages remain unaffected by the success fee, which, in most scenarios, is expected to be covered by the losing party.
- The funding arrangement lacks confidentiality and privilege. The presence of the CFA needs to be made known to the opposing party at the beginning of litigation, and the risk assessment must be disclosed to both the court and, if necessary, the opposing party during cost assessments.
- The CFA creates a financial stake for the lawyer in the outcome of the case, potentially leading them to dominate the litigation strategy and resolution.
- Without purchasing After the Event (ATE) insurance to offset the victor’s costs, the client remains liable for these expenses.