The future of no win no fee legal funding

Currently, under a no-win, no-fee agreement, your solicitor will only be paid if your claim is successful. If you win, the losing party will have to pay your solicitor’s fees and all the costs involved in your case and if you lose, you won’t pay your solicitor, just the costs of the successful party which will be covered by insurance.

Recently, there has been debate about who should pay for the ‘success fee’ which lawyers can charge when they win the case for their client, and who should pay the insurance premiums for after-the-event insurance (insurance which covers you if you lose which pays the other side’s court costs). At the moment, the losing defendant pays both and the claimant keeps all of his damages.

Lord Jackson has put forward recommendations that the current system should change so that the claimant should pay the success fee (restricting the solicitor to taking no more than 25% of any damages received as a success fee). This would be balanced by a 10% increase in what could be awarded as general damages).

In addition if the claimant requires an insurance policy to cover the cost of disbursements should the case be lost, then the cost of this insurance will be paid by the claimant as well. Currently the premium for such an insurace policy may be recoverable from the defendant or its insurer if the claimaint wins.

Muiris Lyons, president of the Association of Personal Injury Lawyers (APIL) argues that "Firstly, solicitors will be less able to offer a Conditional Fee Arrangement [a no-win, no-fee arrangement] to someone whose claim is complex, meritorious, and difficult to win.Secondly, those who are most seriously injured, and have no choice but to sue, are likely to lose money from their damages."

Those against the recommendations argue that if the reforms are implemented, access to justice will be significantly reduced due to it’s unaffordable nature. Claimants on lower incomes may be unable to fund expenditure needed to take a case to court, for example the ‘disbursements’ (police and medical reports and court fees). They argue that claimants will lose a significant amount of their compensation and that the balance of power will shift even more towards the large corporations and insurance companies and against the individual victim.

For more information about no win no fee funding please contact Anne Maguire by calling 01908 692769.