Emma Slade, a solicitor and partner specialising in Solicitors Negligence cases removes the mystery from no win, no fee agreements in solicitors negligence claims.
In a flummox, a client once asked me what a “no fee, no win” agreement was. I had to chuckle at that: if you don’t pay our fees, you certainly won’t win!! But I cannot blame that client. There is a lot to take in when talking about No Win, No Fee agreements – or to give them their correct title, Conditional Fee Agreements (CFA) – and to confuse it further, there is the added complication of understanding After The Event Insurance (ATEI).
Litigation can be expensive and in solicitors negligence cases, a client will have already suffered a financial loss so may struggle to afford the financial burden of having to pay lawyers fees on a monthly basis. By entering into a CFA, the solicitors take on that financial burden. The solicitors’ fees are deferred until the conclusion of the case. Whether the lawyer gets paid will depend on whether or not the claim is successful. If you win, you pay the costs, plus an uplift known as a Success Fee, if you lose, the fees get written off – hence the name “No Win, No Fee”.
There is obviously a risk for the solicitors when they agree to deal with a case on a CFA basis. They face the real possibility that the case will be lost so all the fees get written off and even if the claim succeeds the solicitor will have to wait until the case is over before getting paid. Because of this, the CFA provides for the Success Fee. This is a percentage uplift on the basic fees. The percentage is calculated on a whole host of issues, but it all really boils down to how we perceive the risk. The riskier the claim, the higher the success fee.
If you are successful in the claim, you will have to pay the Success Fee. If the other side have agreed to pay (or have been ordered to pay) your basic costs, you will get a large contribution towards those basic costs – hence the principle that “the Loser pays the Winner’s costs”. But what if you lose? The solicitors fees will get written off (no win – no fee) but what about “the Loser pays the Winner’s costs” principle? Are you going to be faced with a huge legal bill after all? That is where insurance comes in. If you don’t already have Legal Expenses cover, you may be able to buy insurance to protect you against an adverse costs order. Because we specialise in claims for solicitor negligence, we have an arrangement with an insurance company that provides designated insurance cover that enables us to provide you with an After The Event Insurance policy in cases where we conclude that the claim has merit.
Unlike your usual car or home insurance, you do not pay the policy premium up front. Like the CFA, the premium gets deferred to the end and will only become payable if you win your case. The amount to be paid for the insurance will depend on what stage in the proceedings the matter concluded and will be calculated as a percentage of the damages recovered. The closer to trial you get, the higher the percentage. The percentage cost can start from as little as 2.5% and rise from there as the case proceeds. The insurance premium cannot be recovered from the other side, so if you win the case you need to bear this in mind.
If you lose though, this is where the policy really comes into its own. Provided sufficient cover is purchased, it will pay the other side’s costs and reimburse you any expenses that you have had to pay out to third parties (eg. experts costs, court fees etc). Coupled therefore with a CFA, if you lose, the aim is to leave you no worse off financially than you were at the outset of the litigation. Wherever possible, we will always offer to fund dental negligence claims on a no win, no fee basis and with our facility to offer you specialised insurance protection, it is our aim to safeguard you from a large legal costs bill.
If you feel that you have a claim for compensation and require no win, no fee representation, please contact our solicitors negligence team.