The History of No Win No Fee Arrangements

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 authority to define the types of litigation that could be subject to a No Win No Fee arrangement and how they could be administered.

Conditional Fees Agreement Regulations Act 1995

Through this act, the Lord Chancellor made it practicable to use No Win No Fee arrangements in practice by allowing them in personal injury, insolvency and human rights cases.  These regulations also allowed a “Succes Fee” to be included as part fo the No Win No Fee arrangement.  Success Fees are monies in excess of the solicitors’ basic fees and are aimed at offsetting the lost of revenues in cases that were unsuccessful.  The problem with the success fee was the client would be required to pay it even if the case was successful resulting in a situation where the client would not recover 100% of the award.

Conditional Fees Agreement Regulations 2000

This problem was solved with the amendment to the No Win No Fee Regulations in 2000 which allowed the successful party to recover the success fee from the losing party.  At about the same time, Legal Aid (financial assistance for people who could not afford to pay for court proceedings) was withdrawn for personal injury, defamations and corporate cases.  It was also enacted that Legal Aid should be refused where No Win No Fee agreements were a more appropriate form of funding.  No Win No Fee arrangements are currently allowed for all civil cases except family cases.  They may or may not include a success fee.