Let’s face it, making a legal claim is expensive and is certainly not an item that everyone caters for in their monthly budget. Plus, there is the very fearful possibility that you will lose your case and not only will you be lumbered with your own legal fees but, as the loser usually has to pay some of the winner’s costs, you will be facing your opponent’s costs bill as well. Is it any wonder therefore that we are regularly asked, 'can I make a professional negligence claim on a No Win No Fee basis'. Specialist solicitor Emma Slade looks at the availability of No Win No Fee funding for professional negligence claims.
It is probably a good idea if I explain very briefly about how a Conditional Fee Agreement (“CFA” – the official name for a No Win No Fee agreement) works in a professional negligence claim. It works differently in personal injury claims so you will need to speak to a PI lawyer if that is the type of case you are looking at.
If we enter into a CFA with you, we agree to defer our fees until the conclusion of the claim. If you lose your claim, our fees get written off – hence the nickname ‘No Win No Fee’. You may be liable for the other side’s fees but, we can usually obtain an insurance policy to cover you for that eventuality, if you don’t already have one, and possibly even some of the disbursements you may have to pay out along the way – for example, expert’s fees and court fees.
If, however, you win your claim, then we will charge you our hourly rate plus a percentage uplift on those costs - known as a success fee. This percentage uplift is set at the outset of a claim and takes into account the risk that we will be taking in supporting your claim as, in effect, we will be gambling on the success of the case. The percentage uplift can’t exceed 100% of your base costs.
As I have said, the loser usually has to pay some of the winner’s cost. In April 2013, the Coalition Government introduced some controversial changes that have brought great hardship to many people. The success fee and any insurance premium are now something that the winner has to pay themselves, rather than recovering them from the loser as used to be the case. In addition, successful claimants are probably only going to be able to recover about 70% of their basic costs.
Working under a CFA involves certain obligations and responsibilities that both parties to the agreement must comply with. Plus, the Agreement will cover issues like termination, interim payments and the like. Before you enter into any CFA with us, we will spend time with you going through a CFA and explaining to you the full effects and consequences of a CFA.
But going back to the beginning of this article and the question I get asked, “can I make a professional negligence claim on a No Win No Fee basis”, what actually is the answer?
Well, as you can see, when we agree to take on a professional negligence claim under a CFA, we will be gambling on its prospects of success. Obviously, we will not take on cases that do not have a good chance of winning, but for cases that have merit we are often willing accept the risk.
There must also be a certain level of financial loss that arises from the negligence for it to be cost effective for a No Win No Fee arrangement. The small claims court limit is currently £10,000 (January 2019) so that is the starting point for any potential case.
We are happy to review some of your papers to see if we think that there is a good claim. If there are poor prospects of success or the value is too low, we will tell you so candidly and discuss the other options available to you. If you choose not to take the matter further, we will not make a charge for our initial review. However, if we think the prospects are good enough and we are happy to enter into a CFA, gambling our time and fees on it, you can be safe in the knowledge that your claim must have reasonable prospects of success if a lawyer is prepared to bet their money on it. After all, you must have heard about the philanthropic lawyer who wanted to remain anonymous: He refused to sign the cheques!
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