No Win - No Fee Agreements Explained

In the current economic climate, the funding of legal fees has placed an even larger burden on people. One way in which legal fees can be covered is to employ a “No Win - No Fee Agreement”. This is a term that is often heard in the media. The frequency of its use however has led some to view the term in a cynical light, without fully appreciating the potential benefits it can hold for the user.  

 

 A “No Win - No Fee Agreement” is an informal term for what is otherwise known as a “Conditional Fee Agreement” or “CFA”. It is a method of funding legal actions, without the client having to pay his or her solicitor any money. If the action is successful, the solicitor would then be paid by the other side.

 

At Beor Wilson Lloyd, we use CFA’s in all our Personal Injury Department work. The benefit of using a CFA is essentially that our clients keep 100% of any compensation that they are awarded as a result of their accident, with our costs being paid by the defendant.

 

If the claim is unsuccessful, while our client would not receive any compensation, the effect of the CFA means that he or she is comforted in the knowledge that they will not receive a bill from us. Despite this being the case, we are often asked questions by clients to the effect of: “You would never do work that you wouldn’t get paid for, so where’s the catch”?  The illustration below demonstrates that there is certainly no catch.

 

Prospective clients contact us with details of their case; 

 

 

The case is assessed by our staff. If we believe that the case has a

sufficient chance of success, we will contact the prospective client to set up the CFA;   

  

                                                     

The case is started, with the client receiving frequent 

updates as to the progress of the claim.

                                                            

 If the claim is successful:

                                                          

- The client receives compensation for his/her injuries and keeps 100%

 

-  Due to the CFA agreement between the client and us, our bill is paid by the Defendants’ Insurance company

 

If the claim is unsuccessful:

 

- The client does not receive compensation

 

- Due to the CFA Agreement, no legal costs are charged. The client is not charged  for the work we have done

 

The vast majority of our cases are dealt with without having to go anywhere near a court room. However, in matters that do proceed to trial, it is important that clients realise the potential cost consequences that lay before them. Should a client be successful at trial, our costs will be paid by the Defendant. However, the harsh reality is that should a client lose at court, while he or she would not have to pay our bill because of the CFA, they would still be liable to pay the Defendant’s costs, which could be substantial.

 

In order to protect our clients therefore, we take out an “After the Event” insurance policy. The policy does not cost the client a penny and provides complete protection against any cost obligation at trial. This again means that if a case is lost at trial, you will not receive anything, but the claim will not have cost you a penny.

 

As illustrated above, the benefits of using a CFA agreement are substantial and should indeed be considered by clients who wish to pursue legal action.

 

Please visit the Personal Injury Department section of our website for more information on our services, or alternatively please contact us should you wish to discuss anything outlined in this article.

 

Ben Francis

Trainee Solicitor