What is No Win, No Fee funding?
Until the 1990’s No Win – No Fee was forbidden in English law. However when the Government wanted to save money by abolishing Legal Aid it decided to import the concept from jurisdictions like the United States where No Win – No Fee was firmly entrenched in the legal culture. By encouraging solicitors to undertake litigation work on a No Win – No Fee basis the Government thought that access to justice could be preserved, without the public purse picking up the tab.
The idea took off and in no time the British people have grown accustomed to using lawyers on a No Win – No Fee basis.
There are various forms of No Win, No Fee funding, but in simple terms the solicitor only gets paid if the case is successful. In the context of a professional negligence claim, this usually means that if the client wins their case for compensation then the solicitor’s fees become payable. If no compensation is recovered then the solicitor receives no payment for the work carried out.
Does ‘No Win – No Fee’ mean ‘free’?
Perhaps the greatest misconception is the tendency for people to equate No Win, No Fee with ‘free’.
While it is correct that legal services may be provided without charge where a no win, no fee case is lost, those services are not ‘free’ in the event that the case is successful.
When a no win, no fee case is won the lawyer’s fees become payable. In fact not only will the lawyer be entitled to be paid what are known as the ‘base costs’, but in addition to this a ‘success fee’ can also be charged. So No Win – No Fee funding in relation to a professional negligence claim should not be regarded as a free service.
Will a lawyer take a slice of my compensation?
The other major common misconception is that the lawyer is paid by receiving a slice of the compensation that is recovered as a result of the professional negligence claim. Although this type of arrangement does exist (and is called a contingency fee or a damages based agreement) the vast majority of No Win, No Fee arrangements are actually ‘conditional fee agreements’.
Under a conditional fee agreement the successful lawyer receives the base costs on the usual hourly rate basis, together with a success fee that is calculated as a percentage, not of the award, but of those base costs. So, for example, if the success fee uplift is 50% and the client recovers £50,000 in damages, with base costs of £10,000 then the success fee will be 50% of £10,000 ie £5,000 and not 50% of £50,000.
We will explain how professional negligence no win, no fee works and give you some examples before you decide to go ahead.
The benefits No Win – No Fee funding
The huge attraction of No Win, No Fee funding is that it removes much of the financial risk of litigation, enabling people to pursue a professional negligence claim who wouldn’t otherwise be able to fund an action.
Solicitors are obviously very choosy about the cases they take on under a No Win, No Fee agreement. These cases generally involve the solicitor making a huge investment in terms of time and sometimes money, so they need to be reasonably confident of winning and recovering their fees. However, legal outcomes can never be guaranteed and cases will from time to time be lost. When this happens the lawyer will write off the legal fees that have accrued; hence the term, no win, no fee.
The value of your claim is also important and we find that professional negligence no win, no fee funding only works effectively for claims in excess of £10,000 – the current small claims court limit.
What does it mean for you?
Before entering into any sort of professional negligence No Win, No Fee agreement it’s important to speak to the lawyer to make sure you understand what is involved and importantly what your duties and obligations are under the agreement.
You also need to be aware of your potential liability for the legal costs of your opponent in you lose a legal case. This won’t be covered by the no win no fee agreement and you will need to discuss with your solicitor.
We always consider a client’s potential liability for their opponent’s costs and have an arrangement with a specialist insurance company that allows our clients to insure themselves against this risk.
Its also worth bearing in mind that the rules governing nwnf agreements do vary between different areas of law. The rules for nwnf agreements in personal injury law are for instance different to professional negligence no win, no fee, so again expert advice needs to be taken.
We firmly believe that the funding of legal costs in a professional negligence case needs to be dealt with transparently at the outset of the case. Claimants can therefore take advantage of our free legal helpline to establish which method of funding will best suit them and what No Win – No Fee funding will mean for them.
For details of no win, no fee funding for your professional negligence claim contact us now on 0808 139 1595 for a free assessment of your case and whether we can pursue it on a no win no fee basis.