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 is typically limited to disbursements but 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.
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No Win No Fee Solicitors in the UK – Alphabetical
Selected members of the Law Society of England and Wales offering No Win No Fee arrangements are listed below:
- First4Lawyers specialist no win no fee solicitors
- Abney Garsden McDonald Solicitors
- Bailey Smailes Solicitors
- Camps Solicitors
- Dale and NewBerry Solicitors
- EAD Solicitors
- Fairbairn Smith & Co. Solicitors
- Gartons Solicitors
- Hamers Solicitors
- Iacopi Palmer Solicitors LLP
- Jackaman Smith & Mulley Solicitors
- Keith Ready & Co. Solicitors
- Last Cawthra Feather LLP Solicitors
- Machins Solicitors LLP
- Neil Millar & Company Solicitors
- OH Parsons & Partners
- Pattinson & Brewer Solicitors
- Ralli Solicitors
- Seddons Solicitors
- Thring Townsend Lee & Pembertons Solicitors
- Ultimate Law Ltd
- Veale Wasbrough Vizards Solicitors
- Walker Morries Solicitors
- Young & Pearce Solicitors
- Zermansky & Partners Solicitors
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.
Contingency 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.
Contingency 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.