A contingency fee agreement can seem too good to be true. There is no legal fee to pay if your case is unsuccessful – so what’s the catch?
What may surprise many is that there isn’t one. Also known as a No Win No Fee agreement, it’s clear and straightforward in what it offers clients. Compensation if an injury claim is successful and nothing to pay if it isn’t.
So what exactly is in it for your solicitors? Why would they agree to take on a claim on this basis, when they might not be paid?
The simple answer is: the success fee. If your solicitor wins your claim, you’ll be awarded a sum of compensation. Your solicitor will then take a success fee from that amount.
This will be a certain percentage of the total sum awarded to you – and it will be explained to you before you go ahead with the claim. This means no one has to proceed unless they’re happy to.
Success fees are capped at 25%, meaning that the vast majority of compensation is kept by the claimant.
Before the success fee was introduced, solicitors were able to recover their fees from the opponent. However, in 2013, that model was changed. Solicitors then had to take their fees from the compensation awarded to successful claimants.
What a No Win No Fee agreement will do is ensure your solicitor works hard to get you the maximum compensation. If their firm’s success fee is a percentage of what you are awarded, they’ll want to ensure that the total figure is as high as possible.
It’s a similar concept to that of an estate agent. They receive a commission based on a percentage of the sale price of a property. That means they’ll work hard to get the seller the highest amount they can.
A solicitor is risking unpaid work by taking on a No Win No Fee claim that may not be successful. So they will do their best with successful claims to secure the maximum compensation for their clients – and a decent amount for their firm. They have more of an incentive with a No Win No Fee claim.
Securing the most financial redress works in their client’s favour. The higher the amount they are awarded, the higher the figure they can spend on their recovery and getting themselves back into the position they were in before they were hurt.
It also means that a solicitor will not take on a case they don’t think they can win. That will lead to them being upfront with the client about their chances right at the start of the claim. False hopes won’t be encouraged with a No Win No Fee claim.
A No Win No Fee agreement is one that serves both client and legal representative when there is a legitimate wrong to be righted.
Image copyright: Nicola Forenza