No Win No Fee - a fair result for everyone?
No win no fee solicitors
'No win, no fee' has become one of the most popular advertising phrases in British culture and as legal advice doesn't usually come cheap (the average hourly rate for a high street solicitor is in the region of £200 plus VAT), it has caught the attention of the public. Established in law in 2000, no win no fee is more accurately known as 'conditional fee agreements' (CFAs). The principle behind CFAs is that they were designed to ensure easy access to the judicial system for those who could not afford it after the abolition of Legal Aid for compensation claims.
A No Win No Fee CFA means that the losing party in a compensation claims case will pay any costs incurred during a legal dispute. If you win your case, you don't pay any legal costs. This is a tempting offer and may look good at face value, but CFAs have been open to criticism in some quarters for not telling the public the whole story and at worst, for being misleading. The biggest bone of contention is the payment of legal costs which, according to the standard advertising blurbs, would be recovered from the opposing side. However if the losing side cannot afford to pay these costs it could delay the payment of compensation and lead to a protracted legal battle. The other problem is that if your case fails, you may still be liable to pay the costs of the other party.
In most cases, your no win no fee solicitors will insist that clients take out an insurance policy in order to ensure that they are financially able to meet the costs in the event of a case failing. This in itself is not a bad thing but in some cases clients are made to take out loans with high interest payments to cover the cost of these insurance policies.
"No win no fee in prinicple gives the public access to legal representation that they otherwise wouldn't be able to afford which is obviously a good thing," says Nicholas Jervis, managing director of specialist claims experts 1stClaims. "However, often it is the actions of a very few has tarnished the public's opinion of what is an essential service to the victims of avoidable injuries," he adds. "That is why it is vitally important to deal only with reputable companies that lay out exactly what the terms and conditions of the services offered are. No win no fee should mean exactly that, and nobody should have the added anxiety of being hit with an unexpected bill at what can be a very traumatic time," he adds.
The 2006 Compensation Act hoped to tackle some of these problems by introducing the regulation of claims management companies, but although the Act has made registration compulsory and stopped some of the high-pressure selling techniques employed by some companies, the fundamental structure of CFAs has not changed.
"My advice to anyone thinking of taking on a No Win No Fee Solicitor would be to only deal with a company that they know they can trust," says Nicholas. "Do your homework thoroughly before committing yourself to the process. Professional claims companies should act throughout the process with honesty and integrity. As far as we are concerned, the most important person in the entire process is the claimant" he says. "Your No Win No Fee Solicitor should be able to confirm that if you ask them to help you with a claim, you will not have to pay for an expensive insurance policy, and they should also agree that if you win your claim you will keep all of your compensation. 'No Win No Fee' does not cover what will happen if you win your case, and you want to ensure that if you do you do not then have to pay a large part of your compensation to your solicitor. Asking the right questions at the beginning will ensure that you are properly taken care of."
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