No Win No Fee: How Do The Finances Work?

Do I get to keep 100% of my compensation?
Many television or newspaper adverts describe how a personal injury lawyer will take a no win no fee case and guarantee 100% compensation for a client At the end of proceedings. However, do check with whoever takes the details of your claim that you will indeed pay nothing if you lose, and keep 100% of your compensation.

Some cases of, for example, medical negligence or criminal injury may be taken on the basis of a solicitor receiving a portion of any compensation payment. This may be due to the heightened risk involved in pursuing such a case. Such terms are undertaken in Scottish law firms, but in general, solicitors in England and Wales should offer the option of a ‘no win no fee’ contract with the agreement that a client will keep 100% of their compensation if successful. If unsure, a client should ask for a solicitor to run through the terms and conditions of such an agreement before signing.

Don’t forget that some solicitors don’t limit no win no fee arrangements to compensation claims. For example we also run no win no fee employment tribunal, professional negligence claim and inheritance dispute cases

Do I have to pay any costs if I lose my claim?
If you lose your claim, you can be protected from paying costs by an ‘after the event’ insurance policy. Solicitors encourage taking out such insurance, as costs to a claimant on the losing side can be substantial.

Many no win no fee agreements stipulate that it is only a solicitor’s fees that are conditional, so a client may be liable to pay third party fees involved in pursuing a case. These may include court and barrister’s fees, so costs can be extensive. However, if ‘after the event’ insurance is acquired, a premium is usually not payable if a case is unsuccessful. Costs may be incurred if a case is lost through the fault of a claimant, for example, if they fail to act on a court order relating to the case.

Is legal aid available for accident compensation claims?
As of 2000, legal aid was withdrawn for personal injury and accident compensation claims. This ruling also applies to many medical negligence cases, although in certain circumstances, legal aid can be granted. With Bonallack & Bishop holding a contract to bring legal aid cases for medical negligence, we are one of a very small number of law firms permitted to act for those who may have previously found access to the legal system difficult-  by running a no win no fee medical negligence claim.

What is “after the event” insurance?
After the event insurance is a legal expenses policy taken out to cover solicitors’ and other fees in bringing or defending a compensation case. If a claimant loses their claim, they are protected against the payment of their opponent’s legal fees through such an insurance policy. If they are successful, the premium for the policy is usually payable by the losing side.

Many after the event insurance policies contain certain terms and conditions affecting a case, including giving the insurer the power to make a client accept a settlement out of court. However, in the face of potentially enormous legal fees from an opponent, taking out this insurance policy is strongly advised by most, if not all, no win no fee solicitors. Some solicitors may pay for the insurance policy on a client’s behalf until the end of a case, when they will seek repayment from the losing side. This should be checked with a solicitor when discussing the matter of insurance.

What are disbursements?
Disbursements are costs incurred by your no win no fee solicitor in preparing a claim, whether it is a no-win no fee employment tribunal or compensation claim. In preparing a claim, a solicitor may have to request medical or police reports, or the services of a barrister, which can/will incur charges. In the event of a successful case, a solicitor can claim disbursement costs from the losing side, though this depends on the nature of a settlement. If disbursement costs cannot be claimed from an opponent, a successful client may well be liable to pay.

If an after the event insurance policy is taken out, this can generally be used to pay for disbursements, and those of an opponent if a claim is unsuccessful.

Thinking of making a No Win No Fee Employment Tribunal or Compensation Claim? 

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