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The No-Win, No-Fee Deal
Since the end of the advertising ban, most solicitors have had to tout for business, just like accountants or plumbers or taxi drivers. Then legal aid was withdrawn for most injury cases, but the government promised conditional fee agreements (CFAs) would ensure access to justice for all.
The CFA, or no-win, no-fee funding, does NOT involve a percentage of your damages being taken by your solicitor, as in the U.S. For taking the risk of not getting paid, we are entitled to a “success fee” when we do win, and that is paid by the loser, usually an insurance company.
Clients like it because their lawyer has a real stake in their case, unlike the old system, where we got paid whether or not you got any payout. Weak cases are now rejected, on economic grounds, as solicitors only get paid if you win the case. We are entitled to deduct a small amount from your winnings to compensate us for financing the case, as we may have to wait for years to get paid. Some firms, mine included, do not take advantage of that right, and keep only the costs we can collect from the losing side.
No-win, no-fee financing is available for injury claims, and some firms offer it for employment, defamation and even commercial cases. The arrangement is not simple. You are given a lot to read, and we have to explain it all to you in person or over the phone, taking half an hour or so. Another drawback is that it doesn’t include any disbursements in the case. You still have to pay for your medical records and reports, court fees and so on.
Often, you have to get insurance to cover your liability to pay the costs of the other side, should you lose the case after court proceedings are issued. These “after-the-event” policies cost from about £300 for a simple road traffic accident case, to £25,000 or more for a complex and risky medical negligence claim. I try to arrange deferred premiums, where you don’t pay up front, at a cost likely to be recoverable from the other side.
If you have legal expenses cover on your motor insurance, or you are in a trade union, or you have household contents insurance, you may be able to use that for your injury claim. Look at the small print on your household policy – it may well cover you to bring a claim against your neighbour if their dog is out of control and bites you, or to sue your local council after you’ve tripped on the broken pavement. Surprising, but true. You will be assigned a panel solicitor if you take advantage of these “before-the-event” policies, and your case handler may well be in Liverpool, unqualified and with such a huge caseload that they never return your calls, or care if they get the best settlement for you. But it is free, even for disbursements, and most insurers will respect your own choice of a lawyer not on their panel.
Sadly for us old-fashioned specialist lawyers, the personal injury market has now been flooded with claims farmers, or managers, as they call themselves, offering “no-win, no-fee” services, and the worst of them use hard-sell tactics in shopping centres and on housing estates. A few encourage fraudulent claims, and they get nice commissions from selling the claims on to solicitors’ firms, typically for £300 to £700 a case. The term “no-win, no-fee” lawyer now means shoddy and second-class to a lot of people, who have read about the abuses of this kind of marketing. The claims farmers are now regulated, which has helped a bit. They say they provide added value, as they are more approachable than solicitors, which is why people use them.
If you are injured, think about your options. A qualified specialist will fight your corner – and some of us are perfectly nice, too.
Hope Liebersohn
020-8735-9779
hl@hpwsolicitors.co.uk
