Offering you a 100% compensation agreement and offering you a no win, no fee agreement can actually be two very different things. People commonly associate the two together because for years most solicitors for personal injury claims have operated on a no win, no fee basis and the client will keep all 100% of their payout.
On top of that, a no win, no fee agreement is the common term applied for a Conditional Fee Agreement which would in fact take in to account what you pay whether the claim wins or loses.
But now the difference between the two is very important indeed because nowadays most lawyers won’t let you keep 100% of your payout anymore.
What happened to 100% compensation?
Our wonderful government, in misguided efforts to address the “compensation culture” – which in itself has been proven to be a myth – and having faced huge pressure from the vastly wealthy insurance industry who’re upset that their profits get dented by paying out for too many claims (which really is way they’re there!), changed the law to stop lawyers being able to recover all of their fees from the opponent.
For years now a client has been able to keep all of their payout because the insurers of the person or company at fault pays their legal fees. This is fair, because in my opinion the victim should never have to pay or lose out. But the insurance industry is huge, their wealth is vast, and their influence on government and media is significant.
Now, we can still recover fees from the other side, we just can’t recover all of them. One such fee is the Success Fee which helps lawyers fund no win, no fee claims as part of access to justice rules. The result is that a law firm can now take up to 25% of their clients claim to cover this fee. They can’t take any more than that as the government capped it.
On top of that, we can’t recover insurance premiums anymore for insurance we would traditionally take out to protect a client from paying certain costs that might arise in a case as well.
So what is 100% compensation?
So, a 100% compensation agreement means that a lawyer will not take a deduction from your payout. We in fact still offer this for our clients because we agree to waive the unrecoverable Success Fee charge mentioned above. We can afford to do this whereas most other law firms can’t because we only represent victims for personal injury claims and we take on and win high volumes of cases.
And what is no win, no fee?
No win, no fee means that if the claim does not succeed, a law firm should not charge you the fees they have incurred and cannot recover from the other side because the claim hasn’t won. We offer it for claims where we think we have a good enough chance of winning a claim, so it’s a business decision to take the risk of your claim on.
To confirm the difference
So to directly conform the difference, 100% compensation is about deductions if the claim wins, and no win, no fee is about not charging you if the claim doesn’t win.
Now the law has changed and almost every other lawyer out there is taking the full 25% from your payout, it’s more important than ever to grasp the difference between a no win, no fee agreement and an offer for you to keep all 100% of your compensation payout.
Luckily for you, for most types of claims, we can offer you both – so give us a call on 0800 634 75 75 for help and advice today.
