About No Win No Fee
No Win No Fee is a term in the UK commonly used to describe Conditional Fee Agreements (CFA) between lawyers and their clients. In general, the CFA enables people with limited financial resources to enter into litigation and pay their lawyer from the proceeds of a successful outcome. In cases where the lawsuit is unsuccessful, the client’s payment obligations to their lawyer are typically limited to disbursements, but they are likely to have to pay for their opponent’s fees and disbursements incurred. For this reason, clients have the option of purchasing “After the Event” (ATE) insurance to cover the risk of losing. The insurance premium along with the cost of disbursements are usually included as part of the claim. Not all types of cases allow no win no fee arrangements. Family and criminal cases do not allow CFA’s to be used.
Types of Cost Components
There are several cost components to be aware of when investigating the benefits of a No Win No Fee Agreement:
- Basic Charges or Standard Fee – Fees associated with legal work done on behalf of a client. Typically based on the number of hours spent and hourly rates associated with the staff involved with case.
- Disbursements – Payment for expenses made on behalf of the client including but not limited to court fees, experts’ fees, accident report fees and travelling expenses.
- Success Fee or “Uplift” To compensate for the cost of lost cases, lawyers typically are allowed to add a success fee or ”Uplift” in the CFA. This is usually a percentage (not more than 100%) of a lawyer’s basic charges that is added to a client’s bill for which they will seek to recover from the other party if they win the claim.
- After the Event (“ATE”) Insurance Premium – Cost of Insurance as part of a no win no fee agreement to indemnify the costs and disbursements of the lawsuit. Usually purchased at or after the start of the litigation process.
Advantages and Disadvantages
- Because the cost to the client is linked to the outcome of the case. For an unsuccessful case, there is the possibility that the client pays little or no cost.
- Required disclosure of a CFA to the other party may encourage earlier settlement as the other party’s cost will increase in line with the level of the success fee.
- Any damages awarded to the client will not be eaten up by the success fee, as the success fee will in most cases be payable by the opponent.
- There is no privilege, nor privacy attached to the funding arrangement in place. The existence of the CFA must be disclosed to the other party at the outset of the litigation and the risk assessment has to be disclosed to the court and if necessary to the other party when costs are assessed.
- A CFA gives the lawyer a financial interest in the litigation and because of this they are inclined to take control of the strategy and resolution of the litigation.
- Unless the client buys ATE to cover the winning party’s costs, the client is still at risk to pay those costs.
Is My Claim Suited to a No Win No Fee Arrangement?
Not all types of legal action can be covered by a No Win No Fee or Conditional Fee Arrangement. You will need to discuss your circumstances with a solicitor and consider the best course of action for your case. You might want to consider arranging a FREE consultation with one of the companies specialising in No Win No Fee arrangements as a way of finding out more. For example First4Lawyers offer free consultations for claims suited to this kind of arrangement. You can arrange a free consultation with First4Lawyers using this link.