25th March 2014 UNDERSTANDING ‘NO WIN, NO FEE’

Conditional Fee Agreements or more commonly 'no win no fees' are a typical feature of Personal Injury claims, but do they do exactly what they say on the tin? Funding for Personal Injury claims changed drastically in 2000 when legal aid was stopped. It then became the norm to enter into 'No win no fee' agreements. These agreements allow for access to justice for all, usually with no contribution required. Before April 2013, "no win no fee" meant exactly that, lose your case and pay nothing, win your case and keep all your damages. Under the changes in the Legal Aid, Sentencing and Punishment of Offenders Act Legal 2012, it is no longer possible for Solicitors to recover their success fees from the other side. There has however been the introduction of qualified one-way cost shifting (QOCS) which ensures that if a Claimant loses at trial they will not have to pay the Defendant's costs, except in limited circumstances.

Woodwards work on a no win no fee basis, meaning that if you are unsuccessful in your claim you pay nothing. However there have been some slight changes in how Solicitors are now paid for their work. Before the legislation changes on 1st April 2013, Solicitors could claim back all their costs from the Defendants, however now success fees are handled differently. Now Solicitors can set aside a particular percentage (to a maximum of 25%) on your damages, subject to that not being more than the base cost incurred.

WHAT DOES THIS MEAN FOR YOUR POTENTIAL CLAIM?

If you win your claim, you pay our basic charges, our expenses and disbursements and a success fee together with the premium for any insurance you take out. You are entitled to seek recovery from your opponent of part or all of our basic charges and our expenses and disbursements, but not the success fee or any insurance premium. Remember this is capped at 25% of your damages, for example if you win your claim and receive £10,000 in damages, Woodwards would only be entitled to payment of up to £2,500 from your claim. You would still receive at least 75% of your damages.

We, at Woodwards, understand that some firms work on the basis of you keeping 100% of your damages. Whilst this may seem attractive, remember that their incentive to maximise your damages has been effectively taken away. We believe in offering the best service to our clients and seeking the best possible settlement.

Your decision of who represents you needs to be based on what you receive, not what percentage of your damages is taken.

75% of £4000 is £3000, 100% of £2000 is £2000, which would you prefer?

Ask the firm what is the average damages recovered for your sort of claim (incepted after 1 April 2013) in the previous month, they should have that information available.

WHAT IS COVERED IN OUR AGREEMENT?

  • Your claim for damages
    Any application for pre-action or non-party disclosure.
  • Any appeal by your opponent.
  • Any appeal you make against an interim order or an assessment of costs.

• Any proceedings you take to enforce a judgment, order or agreement.
• Negotiations about and/or a court assessment of the costs of this claim.

WHAT IS NOT COVERED BY OUR AGREEMENT?

  • Any counterclaim against you.
    Any appeal you make against the final judgment or order.

WHY ARE NO WIN NO FEE AGREEMENTS GOOD FOR YOU?

No win no fees are extremely beneficial for the client. If you don't win, you don't pay, therefore there is no initial outlay for you as a client nor is there any need to pay anything before the case is settled. This is essentially an advancement of a no win no fee, previously Solicitors could charge an uplift which would cover the cost of any costly investigations, however this was abolished on the 1st of April 2013. As a consequence, now solicitors charge a percentage capped at 25% (as mentioned previously) to cover costs. Although the changes made by the Sentencing and Punishment of Offenders Act Legal 2012 seem to go against the Claimant, after the Judgement in Simmons v Castle, the claimant will now benefit form a 10% uplift on damages. So anyone claiming damages after 1st April 2013 will not be entitled to recover a success fee from the other party, however they will be able to receive a 10% uplift on their general damages.

Remember there is a strict 3 year time period for all personal injury claims, if you think you have a claim do not hesitate to contact Woodward Solicitors on 08453 400061. Working on a no win no fee means that you can get FREE quick and impartial advice.

SOURCES

AUTHOR PROFILE

Stevie Blaylock BA (Hons.),

Trainee Solicitor, Industrial Disease Department

Stevie joined Woodward Solicitors' Industrial Disease team in February 2014, she is currently studying the Legal Practitioners Course and will be graduating with an LL.M in November.