No Win No Fee Lawyers - and other myths

Listening to politicians and some parts of the media you would think that there was a new breed of solicitor called a ‘No Win No Fee Lawyer’. You would also think that they were responsible for most of what is wrong with the world.

The reality could not be further from the truth. Until about the year 2000 most claims for compensation were pursued with the benefit of legal aid for those who did not have the means to pay their lawyers privately. That system actually worked quite well. Most claims succeeded so the taxpayer was rarely called upon to foot the bill. This was normally paid by the offending party.

In 1995 the Conservatives introduced the conditional fee agreement (CFA) to assist those who were not entitled to legal aid but still did not have the means to fund expensive litigation. These were the first no win no fee agreements. Lawyers could charge an uplift to reflect the risk of not being paid – the success fee. There was also an insurance policy to cover the other side’s costs if a claim did not succeed. These ‘additional liabilities’ were payable by the successful claimant out of damages subject to a maximum of 25%.

Then in 2000 the Labour Government extended the scope of CFAs as they were keen to abolish legal aid for almost all compensation claims. To meet the criticism that it was unfair that victims had to suffer a reduction for the additional liabilities, they changed the regulations so that the losing party had to pay them – thus massively increasing the amounts insurers had to pay to successful claimants. Legal Aid has since largely disappeared for damages claims.

So a CFA or no win no fee agreement is the only way that someone other than the wealthy can pursue a claim. There is no such thing as a no win no fee lawyer. If a person has a good case but is of modest means there is no other way of funding the case under the scheme created by successive governments. All lawyers are required to discuss this option with clients.

This also dispels the myth that CFAs encourage spurious cases. Why would a lawyer pursue a case with no realistic prospects of success when he would never be paid for it? The reality is that solicitors carefully assess the merits of a case. If there is a reasonable chance of winning the solicitor will take on the case. If there isn’t then it won’t be taken on. So in fact only those cases with merit are pursued. How this somehow gets us to a mythological compensation culture beggars belief.

So please do not be deterred from asking your lawyer to run your case on a no win no fee basis. For the vast majority it is in fact the only  realistic option.

www.eadsolicitors.co.uk