No Win No Fee Claims

Making a No Win No Fee Claim

The words ‘No Win No Fee’ are frequently used in advertising material based around the issue of personal injury, but the truth of the matter is that many people don’t really grasp exactly what the phrase means, how and when the system came about and how it impacts on people seeking compensation. The truth of the matter is that no win no fee is a system which was set up to widen access to justice and enable larger numbers of people to pursue the compensation to which they are entitled.

If you’ve been injured because of negligence on the part of someone else, whether the injury took place as a result of a road traffic accident, a trip in a public place, medical treatment, an unsafe working environment or any other factor, then there’s every chance you might be able to claim compensation. It’s really little more than simple natural justice – if you’ve suffered pain and distress because somebody else failed in their duty of care to you then it’s only right that this should be recognised, and recognised in a manner which helps you to move forward with the rest of your life. You may have been left permanently injured – psychologically or physically – and suffering of this kind can go on for weeks, months, years or even the rest of your life. Not only will you be experiencing pain and discomfort, but the injury may have left you directly out of pocket, thanks to immediate expenses, medical bills and a loss of earning ability. It simply isn’t right that the person responsible for all of this should be able to walk away, and No Win No Fee helps to ensure that this is not the case.

Of course, as far as the average person is concerned, the prospect of taking legal action is extremely daunting and overwhelming. Building a case, collecting evidence, dealing with insurance companies and dealing with witnesses – often expert witnesses in the case of more complex claims – are the kind of activities which should be placed squarely in the hands of professionals, and professionals of this kind cost money, often a great deal of money. Before the so called ‘No Win No Fee’ system was instigated, this simple financial truth placed a strict limit upon the range and number of people who could take legal action to claim compensation. Legal aid was available, but was strictly rationed and highly means tested, which meant that many people occupied the frustrating position of being too well off to receive help yet nowhere near wealthy enough to buy it for themselves.

Conditional Fee Arrangements were first made possible after the passing of the Courts and Legal Services Act 1990 (Section 58), and began to be enacted in 1995. Before then, it was actually illegal for a lawyer to act on a no win no fee basis, which is to say without demanding a fee up front. Under this new system, financial considerations were taken out of the equation, meaning that the only issue at hand was whether the client had a strong case or not. The lawyer would, under this new system, take on the case knowing that they would only receive a fee if it proved to be successful. Not only did this open up access to justice to a far wider range of people, but it also put in place a system which automatically encouraged lawyers to take on cases strong enough to have a good chance of succeeding. That’s not to say that the prospect of losing was discounted altogether, since the system included the option of taking out insurance against the other party’s expenses in the event of losing a case. Although the system was recently altered in a manner which means that claimants no longer get to keep 100% of their compensation, it still represents a crucial means of accessing justice for millions of ordinary people.

No Win No Fee – The Basic Principles

When the system was first set up, the basic principles under which it operated were that no fees had to be paid up front, and the injury lawyer working on your behalf would only be paid if the case was successful.

During the first years of the No Win No Fee system, the money paid to your lawyer in a successful case – known as a success fee – was taken from the compensation you were paid rather than from the other party. This was altered in the Access to Justice Act of 1999, which created the fully fledged No Win No Fee system, completely taking the place of legal aid in personal injury cases and allowing the lawyer’s fee to be taken from the losing party. This meant that the fear of losing and being financially ruined was taken out of the equation, and while this was clearly a positive change, the conception began to grow – fuelled in part by sensationalist media coverage – that a so called ‘compensation culture’ had grown up. By 2008 the government, prompted by this impression rather than by the steady but actually fairly small rise in the number of cases, instigated The Jackson Report.

Lord Justice Jackson, then Master of the Rolls, was asked to investigate the state of personal injury compensation. After 12 months he published a report stating that success fees should, in the future, be taken from the compensation awarded, up to a maximum of 25%. Another recommendation was for compensation across the board to be increased by 10%. Following the publication of the report, Lord Young of Graffham produced another report entitled Common Sense Common Safety for the Prime Minister David Cameron. Although this investigation of the ‘compensation culture’ concluded that it was, in fact, a myth largely created by the media, it still advised that the recommendations of the Jackson Report should be implemented.

In April of 2013 the Legal Aid, Sentencing and Punishment of Offenders Act 2012 came into force, bringing about the changes recommended in the Jackson Report. After a year of the changes being in force, a YouGov poll found that the number of people who said they would be willing to pursue a compensation claim had fallen from 29% to 25%. This was doubtless driven by a combination of propaganda on the idea of a ‘compensation culture’ and the changes which had been made to the system. Although, post April 2013, the No Win No Fee system is undoubtedly less simple, the basic facets are still in place:

• Claimants are still protected against financial loss.
• Compensation is still calculated on the basis of the type and severity of the injuries received and any financial losses leading directly from those injuries.
• The changes mean that, under a Conditional Fee Arrangement (CFA), a success fee of no more than 25% will be taken from the compensation which is awarded.
• If you lose your claim, then After the Event (ATE) insurance, taken out upon launching your case, will cover the costs of legal fees claimed by the other party.