Updated 13 December 2024
Legal Aid was available for personal injury and medical negligence claims until the end of the last century. With the benefit of Legal Aid, the injured victims of another person’s negligence could pursue their injury claim, knowing they would not have to pay their own solicitors’ costs, whether they won the case or not.
Legal Aid also protected clients from being ordered to pay the other side’s costs if their claim was unsuccessful.
The position changed in 2000 when the government abolished Legal Aid for most personal injury cases. (Legal Aid is still available in a few medical negligence cases.)
Since 2000, No Win No Fee agreements have been used to fund personal injury claims. These agreements have become the primary method for compensation solicitors to provide legal representation to clients seeking justice for various incidents, including car accidents, accidents at work, and asbestos claims.
How does No Win No Fee work?
There are plenty of guides about how No Win No Fee agreements work. Mooneerams Solicitors‘ No Win No Fee guide is easy to follow and answers the most frequently asked questions about how No Win No Fee compensation claims work in practice.
Here is a brief explanation of what happens when you sign an agreement to pursue a No Win No Fee accident claim:
- If you lose your case, you will not usually have any legal fees to pay to your opponent or your solicitor. Hence, the term ‘No Win No Fee’.
- If you win your case, you usually have nothing to pay the other side.
- You will have to pay a fee to your solicitor. The amount you pay will be a proportion of the damages (compensation amount) you receive from winning the claim.
- Your solicitor will explain the terms of the fee agreement to you before you agree to sign it. If you decide to use Mooneerams to handle your claim, the exact percentage will be discussed and agreed upon before you sign the agreement.
Is there a hidden catch with No Win No Fee, then?
No Win No Fee agreements were not invented to try and ‘catch clients out’; precisely the opposite. The way these agreements work is relatively straightforward. Some people may be suspicious of them because they are so straightforward.
When the Access to Justice Act 1999 came into force in 2000 and abolished legal Aid in personal injury claims, No Win No Fee Agreements filled the vacuum. They ensure ordinary people can get legal advice and assistance to fulfil their need for access to justice.
‘No Win No Fee agreements’ do what their name suggests – they prevent claimants from facing, for example, huge car accident lawyers fees if they lose a case. This applies to various types of claims, including No Win No Fee car accident claims, accidents at work, road traffic accident claims and public liability accidents.
Why do some people complain about being hit with hidden or unexpected fees under a No Win No Fee Agreement?
Problems arise when a client fails to fully understand the terms of the No Win No Fee agreement, usually because they haven’t had the terms of the agreement properly explained to them.
It is your solicitor’s job to explain the No Win No Fee agreement clearly, not using complicated legal jargon. If a dispute over legal fees arises between solicitor and client after the agreement’s been signed and the claim was successful, it is usually because:
- The amount of the solicitor’s success fee deducted from the compensation awarded is higher than the client expected.
- An ‘After the Event’ (ATE) insurance premium was taken out of the client’s compensation, and the client knew nothing about this possible deduction when entering into the fee arrangement. Or perhaps the client was aware a premium would be applied but did not expect the amount to be as high as it was.
- Barrister’s (or Counsel’s) fees have been incurred, with the fees taken from the client’s compensation. Barrister’s charges can be expensive. If that is the case, the fee agreement should include a relevant clause confirming that barristers’ fees will be deducted as a specific item.
- The solicitor must explain the terms of the fee agreement to ensure the client understands them before signing. It is also vital that clients do not sign agreements until they feel they fully understand the main points.
It is better to ask the solicitor to explain something several times before you sign an agreement than to get into a dispute over fees you did not expect to pay. This is particularly important when dealing with a solicitor you have found by searching online for terms such as ‘No Win No Fee solicitors near me’ or any ‘No Win No Fee solicitor UK’.
Deduction of an ‘After the Event’ insurance premium from your compensation
When you instruct personal injury lawyers to pursue a No Win No Fee claim, they may ask you to take out an After the Event (ATE) insurance policy when you enter into the No Win No Fee agreement.
The purpose of an ATE policy is to cover you financially should you lose the claim. If you lose the case, the insurance will pay the other side’s legal fees. Some solicitors take out this type of insurance in serious injury claims.
If you win the case, you will have to pay the cost of the insurance premium. This sum will be in addition to the fee you have agreed to pay your solicitor for winning the claim.
The solicitor cannot deduct the premium from your compensation unless the terms of the No Win No Fee agreement specifically provide for this. These premiums can amount to hundreds of pounds.
It is essential you know beforehand:
- whether a policy is going to be taken out on your behalf,
- how much the insurance premium will be, and
- whether, in the event of your winning the case, a separate charge for this will be taken from your compensation.
Many experienced personal injury solicitors will decide not to take out an ATE policy for their No Win No Fee clients at the start of every case. Instead, they back their judgement that you have a winnable case without committing you to pay an expensive insurance premium.
Remember that a solicitor who takes on a No Win No Fee claim will only get paid if they win the case for you. In the meantime, they will have paid fees upfront for expert reports, police reports, medical records, and court fees.
They would not do this unless they thought that, on the balance of probabilities, your case would be successful.
As long as the fee agreement contains a provision that if you lose your case, you have no legal fees to pay, you will have no financial risk. This is one of the key benefits of working with the best No Win No Fee solicitors you can find, such as Mooneerams.
Getting the compensation you deserve
Since Legal Aid was abolished, No Win No Fee personal injury claims have become commonplace.
In most cases, they work well and to the satisfaction of both the client and the solicitor.
When disagreements occur between clients and their No Win No Fee lawyer, it is usually because the legal advisor fails to explain the terms of the agreement properly. This is why working with one of the best No Win No Fee injury lawyers UK has to offer is crucial.
Solicitors should clearly explain how the No Win No Fee Agreement works so that when their clients sign the agreement, they give informed consent to any deductions taken from their compensation. This includes understanding aspects such as claim eligibility, claim assessment, and potential claim duration.
Mooneerams are experienced Cardiff-based No Win No Fee solicitors. To learn more about how we can help you make a No Win No Fee personal injury claim, call 029 2048 3615. You can also contact us online and request a callback.
