Conditional Fee Agreement: How to use a no win no fee agreement to fund your compensation claim for workplace injury
Discover what a conditional fee agreement is (commonly known as a CFA or no win no fee agreement); how a no win no fee ensures you do not pay the majority of your solicitor’s legal fees when claiming compensation for a work injury; how to obtain insurance to pay additional legal costs (known as disbursements) and other types of funding arrangements that might be available to you (including legal protection cover).
What is a conditional fee agreement / no win no fee solicitor costs agreement?
A “conditional fee agreement” or CFA is the technical term used to represent a funding agreement for your solicitor’s legal fees in pursuing a work injury claim (it does apply equally to personal injury claims of other types, such as road accidents, etc.).
An alternative name used by solicitors with the public for the same agreement is a “no win no fee” agreement.
As the name suggests your liability for payment of your legal fees is conditional on success. In other words – if your solicitor does not win your work injury claim – you do not have a liability to pay your solicitor’s fees (exceptions may apply as specified in the agreement, such as if you have misled your solicitor about the work accident circumstances or injuries). However, if you do win – you have a liability to meet your solicitor’s fees in making a claim.
This does not necessarily mean you will have to pay your solicitor’s fees in the event of success. In a work injury claim – as other personal injury claims, part of your claim from your employer will be for your legal fees (this is in addition to compensation for your injuries). Your employer however will have no duty to pay your legal fees if you have no liability to pay them yourself.
In other words – if you win your claim and did not have a liability to meet your legal fees – your employer would not have to pay your solicitor’s fees as part of your claim as you would not have to pay them yourself. Slightly complicated – but this is how the law works.
This is also why the term used with the public became popular – no win no fee. If you do not win you have no fee to meet – if you do win you do have a liability to meet your solicitor’s fees (the majority of this fee is met by your employer as part of your work claim – see later).
What should a work accident no win no fee include?
The conditional fee agreement should set out: the date the agreement is to take effect; the hourly solicitor legal fees rates for different grades of solicitor who may act in running your claim; the annual date the legal costs rates can be reviewed by your solicitor and a description of the success fee.
Your solicitor costs rate describes how much your solicitor is entitled to charge per hour, which will vary depending on the number of years experience of the solicitor concerned. For example – a solicitor with 3 years experience will have a lower hourly rate than a solicitor with over 10 years experience.
The success fee describes how much of an uplift, or percentage enhancement, your solicitor can charge if your work accident claim is successful. This is normally expressed as a percentage – for example a success fee uplift of 50% will add an extra 50% to the hourly rate if your claim succeeds.
These details are very important, as even though you will not be responsible for your legal costs if your claim fails – if your claim succeeds it is likely that your employer (and in turn your employer’s insurer), who is legally at fault for your work accident (the losing party) will not only have to pay you compensation for your personal injuries, but also the majority of your lawyer’s legal costs – as described by the conditional fee agreement (for no win no fee agreements dated on or after 1st April 2013 – the losing party no longer has to pay all of your legal costs when you win your claim, so your solicitor is entitled to deduct up to 25% of your compensation payout to offset unrecovered legal fees).
The idea behind the success fee is to ensure that your solicitor is compensated for the costs missed out in claims he was not successful in. In essence – your solicitor is gambling that should he win your claim he will receive his legal costs plus the success fee.
A no win no fee agreement is therefore a very useful tool – you will feel that your solicitor is doing everything possible to win your claim, as failure will result in a loss of all the chargeable time spent by your lawyer in running your work accident claim.
What are legal disbursements and can these can be covered by a conditional fee arrangement?
Disbursements are sums of money that your lawyer has to pay out on your behalf to allow you to make your work injury claim and include such things as the cost of obtaining a medical report.
An insurance policy to meet the cost of these disbursements (should you lose your work injury claim) can be obtained via your solicitor.
What are barrister’s fees and are these fees covered as part of your no win no fee agreement?
See our whiplash compensation lawyer article (using a road accident as an example) that describes why your solicitor might wish to instruct a barrister before settling your work accident claim.
Your solicitor can put in place a barrister’s conditional fee agreement – whereby the barristers fees are met in a similar way to those of your solicitor under a no win no fee agreement.
Are there any other types of legal funding agreements for solicitors’ fees other than conditional fee agreements?
There are many other types of legal funding agreements available to meet your solicitor’s fees for a work accident claim. However, most are far more expensive than conditional fee agreements and practical reality are generally not considered (with the exception of legal protection cover).
Legal protection cover is in essence a Before The Event Insurance Policy – before you have had a work accident you have paid slightly extra on an insurance policy to cover the cost of paying a solicitor (should you have need of a solicitor during the period of your insurance).
For example, you can often find legal protection cover on household contents insurance, which will cover your solicitor’s costs in making work accident claims and many other types of injury claim (even sometimes contractual disputes).
Tip – Household contents legal protection covers most type of accident claims, but not road accident claims. You would need legal protection cover on your motor insurance to meet your solicitor’s costs in making a road accident claim.
Summary Of Conditional Fee Agreement / No Win No Fee Costs Agreements
In this article – you have seen that a conditional fee agreement is the technical name for a no win no fee agreement; how a CFA ensures you do not pay your solicitor’s fees if your work injury claim is not successful and how the majority of your legal expenses / solicitor fees are payable by the other side in the event of success.
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