Understanding No Win No Fee or Conditional Fee Agreements

What is a conditional fee agreement?

A Conditional Fee Agreement is an agreement where a lawyer can offer a potential client to set out a fee structure which means that if they agree to take on the client's case and are successful that they will be able to charge a limited success fee on top of what they would normally be able to charge and in the event of the case being unsuccessful then no fee will be charged to the client.

These agreements are more generally known as "no win, no fee" agreements.

The benefit to a potential client of this type of agreement is obvious. It means that the potential client is seeking to rely on the expertise and judgement of their intended lawyer in pursuing a claim.

These type of agreements were effectively brought in following the demise of legal aid particularly in relation to personal injury claims. It passes the risk of running claims on to the lawyer. If the lawyer gets it wrong he will not get paid.

Investment from the Lawyer

The lawyer is effectively making an investment in the client's claim. He is offering his expertise and his services to the client to enable the client, who would not otherwise potentially be able to afford to employ the lawyer, to pursue a claim.

If the claim is successful then the lawyer, depending upon the type of case, but for example in relation to a road traffic accident, is entitled at the present time at least to charge an uplift on his basic costs of 12.5%. If the matter proceeds and is resolved by a trial (a court hearing) and the claim is successfully proceed then the uplift will be 100%. The uplift that the lawyers recover of, say in a road traffic accident of either 12.5% or 100% if the matter proceeds to trial goes some way to enabling lawyers to take on cases and to cover the costs that are incurred in taking on and running those cases that are not successful, or at least covering the costs of advising potential clients whether they have a claim or not.

Chances of success

Whether a lawyer is prepared to offer a client this type of agreement depends on a number of factors. The main factor here is the prospect of success. The definition of success can also vary but in basic terms the same amount of work has to be carried out by the lawyer whether the case is won or lost. The lawyer needs to be fairly certain of the prospects of the case and needs to be sure of the facts of the potential case and needs to "buy into" the client's claim. After all the lawyer is making a considerable potential investment in that client.

The potential success of a case is obviously whether the claim had merits in the first place but assuming that the claim has the potential then the success of the case is based on the expertise of the lawyer conducting the case but also is based on the information, the documentation and facts that are presented to him by the client and obtaining further information and documents that may become relevant during the course of the lawyers' investigation and to the claim. Despite what might be written in the press at the present time about these type of agreements and ambulance chasing lawyers, lawyers offering clients Conditional Fee Agreements are taking a considerable financial risk in agreeing to enter into such an arrangement with a client. They are making a considerable financial investment with the client and his case. These agreements are entered into, not only with the more straightforward type cases but also serious and complex types of cases where the outcome is far from certain.

It is important to understand that if the case is lost then the client will not be liable to the lawyer for the lawyer's fees. However that is subject to provisos that the client fully co-operates throughout with the lawyers, confirms instructions to the lawyer to allow them to do the work properly, not to ask the lawyer to work in an improper and unreasonable way and not to deliberately mislead the lawyer and to attend any medical examination or court hearing.

If the client fails to co-operate with the lawyer in any of the ways referred to above then the lawyer can recover from the client the basic costs that he has incurred in pursuing the claim.

The agreement specifically includes any disbursements that might be incurred in pursuing the claim such as court fees, medical report fees, police report fees and in some cases counsel's fees.

Acting in best interests

The lawyer in return must always act in the client's best interest, subject to any duty to the court, explain to the client the risks and benefits of legal action, give the client best advice about whether to accept any offer of settlement and to give the best information possible about the likely cost of the claim for damages.

It is important to note when clients enter into these type of agreements with the lawyers it is very much a two way working relationship that both the lawyer and the client agree to enter into. It is in both of their interest that the claim is successful.

If you have any questions or would like to talk with us or arrange a free initial telephone consultation, please call us now on 01344 512370 or email: enquiries@ascotlawyers.co.uk.

Alternatively, complete our contact form and we'll get a relevant member of our team to contact you.

More about funding legal claims »