The History of No Win No Fee Arrangements

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The History of No Win No Fee Arrangements

Courts and Services Act 1990

Through this Act, Conditional Fee agreements were made lawful. It gave the Lord Chancellor the power to define which types of litigation could use a no win no fee arrangement and how those agreements could be administered in practice.

Conditional Fees Agreement Regulations Act 1995

Through this Act, the Lord Chancellor made it more practical to use no win no fee arrangements by allowing them in personal injury, insolvency and human rights cases. These regulations also allowed a “Success Fee” to be included as part of the arrangement. A success fee is an extra fee charged if a claim succeeds, rather than if it fails. It was intended to help cover the risk of solicitors not being paid for unsuccessful cases. Even so, many people worried about what would be deducted from damages, because a successful claimant might still not keep 100% of the award.

Conditional Fees Agreement Regulations 2000

This concern was partly addressed by amendments to the No Win No Fee Regulations in 2000, which allowed the successful party to recover the success fee from the losing party. Around the same period, Legal Aid, meaning financial help for people who could not afford court proceedings, was withdrawn for personal injury, defamation and corporate cases. It was also made clear that Legal Aid could be refused where no win no fee agreements were seen as a more suitable form of funding. No win no fee arrangements are now commonly linked with a conditional fee agreement, often shortened to CFA, although other funding models such as a damages-based agreement, or DBA, may also be discussed in some legal contexts. Readers may also come across disbursements, which are case expenses such as medical reports or court fees, and these are separate from whether a success fee applies.

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