WHAT DOES ‘NO WIN NO FEE’ ACTUALLY MEAN AND WILL I HAVE TO PAY ANY LEGAL FEES?

May 21st, 2008 Hinchliffes

Published in Truckstop News – February 2008.

In this month’s issue Steven Hinchliffe of the specialist Personal Injury firm Hinchliffes Solicitors considers the question “WHAT DOES ‘NO WIN NO FEE’ ACTUALLY MEAN AND WILL I HAVE TO PAY ANY LEGAL FEES?”

There are various ways to fund a claim for personal injury compensation, but perhaps the one that is most commonly referred to is under a “No Win No Fee” arrangement. What may not be so clearly advertised is that although you might not have to actually pay out any money, you may not end up with your full compensation. It is always worth making some enquiries before you sign up to this type of arrangement.

A “No Win No Fee” agreement is more properly described as a “Conditional Fee Agreement” (CFA). This is a written agreement between you and your solicitors in which they agree to act on your behalf in making the claim for compensation, but accept that they will only be paid their fees if the claim is successful. If the claim is lost, they will not be entitled to receive any fees, but they are likely to be able to recover any expenses that they have paid out on your behalf, for example in obtaining your medical records and a medical report, or fees paid to the Court, and they can usually ask your legal expenses insurers to pay them on your behalf.

Even though a CFA should protect you from paying your solicitors’ fees, because of the risk of you having to pay any expenses if your claim is lost (including your opponent’s legal fees if a Judge finds against you at a trial), it is prudent for you to have some type of legal expenses insurance cover in place. All solicitors should therefore explore whether you already have the benefit of such cover before they finalise the CFA. All of your insurance policies should be considered (eg car, home and contents, credit card insurance, etc), as should any Union membership.

If there is no existing cover you will need to take out a fresh policy, known as an “After the Event” policy and your solicitors should be able to make the necessary arrangements for you. You should consider asking what the policy premium will be and whether you will be required to pay this. In some situations the insurers will wait until the claim has concluded before the premium is paid, and at which time it will either be paid by your opponent’s insurers (if the claim is successful) or by the policy itself (if the claim is lost).

It is not appropriate for you to have an “After the Event” insurance policy if you already have existing legal expenses cover. If your solicitors do not make all the necessary checks and simply require you to sign up to a “scheme” that incorporates a CFA and linked “After the Event” policy, it is likely that even if your claim is successful the policy premium will not be recovered from your opponent’s insurers and you may end up having to pay it yourself. This situation can arise if you are making a claim through a claims management company, rather than direct through a firm of solicitors, as the company is likely to receive a large commission for every “After the Event” policy that is taken out. Some companies also ask you to take out a loan to pay the policy premium, and you will always be responsible for the interest on the loan.

Some solicitors will offer you a CFA and will be willing to pay the expenses incurred during the claim on your behalf. However, others may ask you to pay these expenses as they arise. If your claim is successful and your opponent’s insurers pay your legal costs (including the expenses that you have paid), they should be reimbursed to you, but if any of the expenses are disputed, you may not be reimbursed the full amount.

You should also be aware that some “No Win No Fee” arrangements are in fact “Win Fee” situations, where you do not pay legal costs if your claim is not successful, but you do pay a fee or lose a percentage of your compensation if you win. This can be a considerable sum.

Therefore, whenever you see the phrase “No Win No Fee”, always look behind the headlines to see what you are actually signing up to.

QUESTIONS & ANSWERS

How can a solicitor offer a free service? It sounds too good to be true and there must be a catch.

Solicitors who offer such a service will almost certainly work under the terms of a Conditional Fee Agreement. If your claim is lost, they do not get paid any fees and will only recover the expenses that they have paid out during the claim. However, if your claim succeeds, your opponent’s insurers will pay their fees and expenses, and may also have to pay an extra sum depending on how much risk was involved in taking on your case, which is known as a “success fee”. All you have to do is co-operate fully throughout the claim, so you have the best chance of succeeding.

Why do I have to have insurance to cover my claim?

Even though you may not have to pay your solicitors’ fees if your claim is lost, you are likely to be responsible for the expenses they have paid out on your behalf during the claim, eg in getting a medical report detailing your injuries, and which could amount to several hundred pounds. Also, if the Court became involved and at a trial the Judge dismissed your claim, you would probably be responsible for paying your opponent’s legal costs (ie their solicitors’ fees and expenses) and these could run into thousands of pounds. Unless you have a lot of spare cash, you will need insurance to cover you against these risks.

I contacted a claims management company to handle my case as I was nervous about using a solicitor because of the legal fees I might have to pay, but the claims company then put me in touch with a solicitor. Whose fees will I have to pay?

You will need to carefully examine the paperwork supplied by both the claims management company and the solicitor, which should set out what fees you will be responsible for in certain situations, ie if your claim is lost, or if your claim is won. You may end up not having to pay any fees at all, but if you have any doubts ask for a full and clear explanation and if this is not given you might want to walk away. Do not be afraid to contact a solicitor direct – you may be surprised how approachable they are!

ENDS

(Other Personal Injury FAQs)

PERSONAL INJURY CLAIM SOLICITORS:-

If you have suffered any form of accident contact personal injury specialists Hinchliffes Solicitors for immediate legal advice, to find out if you are entitled to make claims for injury compensation. All cases are conducted on a No Win – No Fee basis, where the Client keeps 100% of the compensation recovered.

Call now on 0800 138 1348 to speak direct to a personal injury lawyer or go to our Start Your Claim Now page to submit details of your personal injury claim online.