A “No Win, No Fee” agreement, known as a Conditional Fee Agreement (CFA), or a Damages Based Agreement (DBA) is a financial arrangement between a client and a solicitor that allows individuals to pursue legal claims without the burden of upfront legal fees., Under a ‘No Win, No Fee’ agreement, the solicitor agrees to represent the client on the condition that their fees will only be payable if the case is successful. If the claim is unsuccessful, the client typically will not have to pay we any legal fees to the solicitor.
How Does a No Win, No Fee Agreement Work?
- Initial Consultation: The process begins with an initial consultation where the solicitor assesses the case. This assessment will help to determine the likelihood of success and whether the case is suitable for a No Win, No Fee arrangement.
- Agreement Terms: If the solicitor agrees to take on the case, a Conditional Fee Agreement or a Damages-based Agreement is drafted. This document outlines the terms, including the percentage of compensation (known as a “success fee”) that the solicitor will receive if the case is won. This success fee is typically set at a certain percentage of the compensation awarded.
- Legal Proceedings: The solicitor then undertakes the necessary legal work to pursue the claim, which may involve gathering evidence, negotiating settlements, or representing the client in court.
- Outcome:
- Successful Claim: If the claim is successful, the solicitor’s fees and the success fee are deducted from the compensation awarded before the remaining compensation is paid to the client.
- Unsuccessful Claim: If the claim is unsuccessful, the client typically does not pay any legal fees to the solicitor However, it’s crucial to understand the specific terms of the agreement, as there may be exceptions or additional costs involved.
- Insurance: Some solicitors may recommend taking out insurance to cover potential costs if the case is lost. This can be known as after-the-event insurance. It is important that you understand the terms and costs associated with such policies.
Benefits of No Win, No Fee Agreements
- Access to Justice: These agreements make legal representation accessible to individuals who may not be able to afford it otherwise, allowing them to make a legitimate claim without financial risk.
- Reducing Risk: Clients are protected from the financial burden of legal fees if their case does not succeed, as they are not required to pay solicitor fees in such instances. This is the basis of a no-win no-fee claim.
Considerations Before Entering a No Win, No Fee Agreement
- Success Fee: Understand the percentage that will be deducted from your compensation as a success fee. This should be clearly outlined in the agreement.
- Additional Costs: Inquire about any other potential costs that may arise, such as court fees or expenses for expert witnesses, and how these will be paid.
- Transparency: A reputable solicitor should provide clear and comprehensive information about the terms of the agreement, making sure that clients are fully informed before proceeding.
No Win, No Fee agreements have become a cornerstone in providing access to legal for many individuals, particularly in areas like personal injury, medical negligence, and financial mis-selling claims. By removing the barrier of upfront legal costs, these agreements allow individuals to seek justice without the fear of financial repercussions.
