These types of agreements are based on the outcome of a case- win or lose. They were originally brought in to fill the gap between those that were eligible for legal aid and those that could afford to pay for legal representation however, they are now extremely common as it allows solicitors to still recover the same fees without having to charge their clients.
So how do they work? Many people often find it difficult to understand how they can pursue a claim, receive compensation (which in some cases is a large sum) and not have a bill to pay. To many it seems strange for a solicitor to be doing so much work for them but not sending them a bill. But please do not worry- we do get paid (after all we are still a business).
A No Win No fee agreement means that if you lose the case you will not be liable for any costs that the solicitor has incurred – we simply write these fees off and are able to claim back for any disbursements (such as medical appointments)from our insurance. This is the reason that many solicitors will only take on cases on a No Win No Fee agreement if they believe that they will be successful. On the flip side (and the much happier one!) if your case is successful your solicitor is, by law, able to recover their costs from the defendant and therefore does not need to come to you for them. This way you receive 100% of the compensation you are awarded and the solicitor also gets paid.
When you receive your copy of the No Win No Fee agreement, it can seem daunting as it sets out all the fees that a solicitor is working on. Please do not panic- this is simply because under Rule 2 of the Solicitors Code of Conduct solicitors have to give their client’s the best information possible about the likely overall cost of a matter at the outset. Therefore solicitors are obliged to set out the fees in this paperwork. The other reason why this is also necessary is that we have to show you what you would be liable to pay-should you break the agreement.
However, do not panic! Another requirement of the CFA is to provide the client with the specific circumstances where they will have been considered to have broken the agreement. This is not a very easy thing to do as your solicitor will try as much as possible to ensure that you do not end up being billed- believe it or not we don’t actually enjoy sending client’s bills and avoid it whenever we are able to.
Hopefully, this blog has cleared up the common misconceptions about no win no fee agreements and dispelled any fears. If you feel you are entitled to compensation please contact The Injury Lawyers and we will be more than happy to explain in further detail.