Injured woman with broken arm and neck brace reading a no win no fee agreements with computer next to her for research.

No Win No Fee Explained: How To Fund Your Personal Injury Claim

Find out how no win no fee agreements (technically called Conditional Fee Agreements or CFA’s) can allow you to claim personal injury compensation without paying your solicitor’s fees up front.

We explain how the majority of your legal fees can be claimed at the conclusion of your claim from the person considered legally at fault.

Finally, we discuss other alternative ways of funding your claim.

Table of Contents

What is a no win no fee agreement?

A no win no fee agreement is a type of funding arrangement to meet your solicitor’s legal fees in pursuing a personal injury claim on your behalf.

The technical name for a no win no fee is a Conditional Fee Agreement or CFA.

Why The Name – No Win No Fee?

Solicitors tend to use the term “no win no fee” when speaking with their clients. It has become popular as it helps explain how the agreement works.
If you do not win – you have no solicitor’s fees to meet.

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 claim, you do not have a liability to pay your solicitor’s fees.

However, if you do win – you have a liability to meet your solicitor’s fees in making a claim.

Your Legal Fees Can Be Included As Part Of Your Claim

Even though you have a liability to pay your solicitor’s fees at the end of a successful claim. You will be please to know – it does not mean you actually will pay them all.
This is because the majority of these fees are met by the person you make your claim against. This is included in your personal injury claim. See later.

A no win no fee can be used to fund all manner of personal injury claim. For example – road accidents, work injuries, clinical negligence, industrial disease claims, etc.

Exceptions When You May Have To Pay Your Solicitor’s Fees

The no win no fee agreement may specify when you might have to pay your solicitor’s fees. For example – when you attempt to change solicitor, the agreement might require you to pay your current solicitor for the time spent on your claim.

Alternatively – you may have deliberately misled your solicitor about the accident circumstances or the extent of your injuries resulting in a finding of fundamental dishonesty at court. Here you would run the risk of not only paying your solicitor’s costs, but also that of the other party’s solicitors.

Your legal costs are made up of two main parts:

Your solicitor’s professional fees

Fees for the time spent by your injury lawyer working on your compensation claim. The amount will depend on the charge per hour known as the “charge rate”. This is sometimes referred to as the hourly rate.

You Should Be Notified Of The Charge Rate In Writing

You should be notified of your solicitor’s charge rate in writing at the beginning of your claim.

Disbursements

Disbursements are sums of money that your solicitor makes no profit on, but pays on your behalf. For example – the expense to receive copies of your GP notes and money paid in court fees to start your claim at court.

Insurance Policies To Meet Disbursements

Should you lose your claim, you will have to meet your own disbursements expense.
You will see later in this article the types of insurance policies, which can protect you from paying your disbursement expense.

Other side’s costs

Generally in personal injury claims – you will not be responsible for paying the other side’s legal costs.

However, if your claim is found to be fundamentally dishonest – you will be responsible for paying the other side’s legal costs. You may also be required to pay your solicitor’s legal costs.

Fundamental dishonesty refers to claims that are either staged, fraudulent or are grossly exaggerated.

Fundamental Dishonesty When Part Of Your Claim Is Exaggerated

It may be that you have a legitimate claim, but you are exaggerating one part of it.
For example – you injure your leg and claim to be unable to walk and reliant on a wheelchair. However, video evidence is obtained showing you playing football.
Here your whole claim may fail on the grounds of fundamental dishonesty for exaggerating a significant part of your claim.

“Yes” – generally speaking your claim is for compensation for personal injury (pain and suffering and financial loss and expense) plus the majority of your legal fees in making your claim.

Claim Legal Fees If Your Personal Injury Claim Succeeds

In the event of success – the majority of your legal fees can be claimed in addition to your compensation from the person the law considers legally at fault.

This is true for most types of personal injury claim. Examples include work injuries, road accidents, medical negligence, industrial disease, etc.

Legal Fees Cannot Be Claimed In Small Claims And Criminal Injuries

Small claims (even if successful) do not allow legal costs to be claimed.
See our small claims and road accident small claims articles.
In addition – legal costs may not be payable in other types of claim. For example, criminal injuries, are subject to a tariff and also do not allow legal fees to be claimed.

Watch Out!! You will rarely be able to claim all of your legal costs from the party at fault. Invariably, there will be a shortfall.

You Must Have Liability For Your Legal Costs

To be able to claim any legal costs from the other side – you must have a liability yourself to meet your solicitor’s legal fees in the event of success.
Therefore – you must have a valid no win no fee agreement (or other funding agreement) in place when you first instruct your solicitor.

Imagine you suffer a broken arm at work due to equipment failure. This type of injury is beyond the small claims limit, so legal costs can be claimed in addition to your compensation for injury.

Your solicitor makes a personal injury claim against your employer. Your employer will have employer’s liability insurance to meet any claims for injury at work.

A legitimate no win no fee / CFA must be put in place at the commencement of your claim. Otherwise, your employer will have no duty to pay your legal fees (if you have no liability to pay them yourself).

You succeed with your claim for personal injury compensation and your solicitor recovers the bulk of the legal costs for running your claim from your employer’s insurers.

work accident conditional fee agreement
Work Accident Conditional Fee Agreement

What should a no win no fee / conditional fee agreement include?

The conditional fee agreement should set out:

A Solicitor Cannot Act Without A Funding Agreement

No solicitor should act in your personal injury claim – unless a funding arrangement is first put in place.

The law prevents this under a doctrine known as champerty and maintenance. In other words – solicitors should not of themselves cause and fund litigation to occur.

Date the agreement is to take effect

This is the date the no win no fee agreement begins to fund your claim.

Your solicitor fee rate describes how much your solicitor is entitled to charge per hour. This amount 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.

Different Solicitors May Work On Your Claim

You may have a number of different solicitors or legal assistants working on your claim. Each may have a with different charge rates as set out in your no win no fee agreement.

Annual date charge rates can be reviewed

Personal injury claims can take a long time to complete – sometimes a number of years. Your CFA should include a term as to when your solicitor’s hourly charge rates can be reviewed.

The success fee

The success fee describes how much of an uplift, or percentage enhancement, your solicitor can charge if your personal injury 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.

The idea behind the success fee is to ensure that your solicitor is compensated for the risk that the claim may not be successful and no legal costs recovered.

Whether this sum can be claimed from the other side depends on when your no win no fee agreement was put in place.

Law Change – Recovering Legal Fees / Deduction From Compensation

The law surrounding recovery of fees using a no win no fee agreement changed on the 1st April 2013.
An agreement set up prior to the 1st April 2013 date would result in the losing party paying your solicitor’s fees, including the success fee (in the event you winning your claim).
However, after this date the law changed so that the losing party no longer had to pay all legal fees.
Therefore, your solicitor became entitled to deduct up to 25% of legal fees (including VAT) for unrecoverable legal costs.

Percentage cap on deductions from compensation

You may not be responsible for your legal fees if your claim fails. However, if your claim succeeds – your solicitor will seek payment of the bulk of your legal costs from the person-at-fault as part of your claim.

Watch out!! Due to changes in the law – the person at fault does not have to pay all of your solicitor’s costs. Your solicitor is therefore entitled to deduct from your compensation any unrecovered fees. This deduction from compensation is typically capped at 25%.

Be sure to agree the figure for the maximum percentage deduction from your compensation that your solicitor can make. This can be any percentage from 0% up to a maximum of 25% and should include VAT.

Additional Cost For After The Event Insurance

In addition to the percentage deduction – there may be an additional expense for the cost of an after the event insurance.
See later in this article.

Disbursement funding

Disbursements were described at the beginning of this article as expenses your personal injury lawyer has to pay out on your behalf.

Sometimes, if you have a no win no fee agreement – your solicitor is prepared to meet the disbursements expense until the end of your claim and recover the expense from the loser (should your claim be won).

If your claim is lost you may have to pay these disbursements.

Disbursements funding is a type of insurance policy, which will pay your disbursements if your claim is lost.

Client signing a no win no fee agreement with a solicitor opposite
Conditional Fee Agreement No Win No Fee

Barrister’s fees

See our whiplash compensation lawyer article for a road accident example of why your solicitor might wish to instruct a barrister before settling your claim.

To cover this expense – your solicitor can put in place a barrister’s no win no fee conditional fee agreement. Whereby the barristers fees are met in a similar way to those of your solicitor.

The policy you take out after you have had your accident is known as “after the event insurance” or ATE insurance. It can cover the other side’s costs if your claim is unsuccessful and it may also cover some of your own solicitor’s costs.

This insurance can often be purchased on credit.

The ATE expense is no longer recoverable from the other side (in the event of a successful claim).

Exception For Mesothelioma

The ATE insurance premium may still be recoverable in Mesothelioma claims.

Is there an alternative to no win no fee?

“Yes” – there are a number of different funding options that may be available to you. For example – legal protection cover.

We look at these options in our legal expenses articles.

Do no win no fee agreements differ across the UK?

“Yes” – the rules for no win no fee agreements vary across the UK.

In England and Wales the rules are as described in this article. However, in Scotland and Northern Ireland – the availability and terms of no win no fee agreements can differ than England and Wales.

SUMMARY

A no win no fee agreement is a very useful tool. You do not have to pay your fees upfront as your solicitor takes the risk of not winning your claim.

Therefore, you will feel that your solicitor is doing everything possible to win your claim, as failure will result in a loss of legal fees.

FREE Legal Help – Online And Telephone

Why not make use of our free initial legal help options. You can not only call direct to speak with a solicitor, but also ask a question, have your claim assessed and discuss no win no fee funding of claims.

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