Who pays the bill on no win no fee*?
The phrase no win no fee* refers to the traditional Conditional Fee Arrangement, (CFA) introduced in the UK in the late 1990s to replace the legal aid system for personal injury claims, which was withdrawn. No win no fee* has worked quite successfully, on the basis that if the claimants win no fee* is payable by them, but the tab is picked up by the losing side. In general terms, the losing side paid the legal fees and the “success fee” of the winning side. Sometimes costs are awarded by the court and the losing side will pay those too, but costs are made on a discretionary basis and ultimately, it’s down to a value judgement by the court, so no hard and fast rules apply. The skill of the solicitor or barrister will determine how the costs are apportioned.
From April 2013, new rules come into force by which the losing side will not have to pay the first 25% of the success fee. The success fee was an additional fee on top of the standard fees and only payable if the lawyer won the case. In other words if he didn’t win no fee* was receivable for the success portion and the solicitor’s own insurance paid his fees. Normally, if the solicitor feels there is a risk of losing the case, he will advise the client to take out an insurance policy against the losses, so if he doesn’t win no fee* is payable and the insurance company will pick it up.
The only way is up
The changes to the law have partly been driven by a perceived rise in insurance company pay-outs for personal injury compensation, in particular for whiplash claims, to the extent that the trend may have driven annual motor insurance premiums up by as much as £90 p.a. The government is concerned and anxious to dampen this rising trend. Of course, it may not only be opportunists seeking a bit of free dosh. We have to recognise that our roads get busier and more hectic every year, with more private and commercial vehicles, two-wheelers and pedestrians.
Date Published: March 21, 2013
Author: David Brown