no win, no fee

• what is a no win no fee aka?

  conditional fee agreement
• when are conditional fee agreements used?

  civil cases that aren't covered by legal aid e.g. personal injury
• what happens if you lose your case under a conditional fee agreement (CFA)?

  solicitor agrees to take no fee OR reduced fee
• what type of insurance can be taken out to prevent claimant's from having to pay opponent's legal fees?

  ATE - After the event
• what happens if you win your case under a CFA?

  -pay agreed legal costs

  -pay ATE insurance

  -pay success fee
• what is a success fee?

  when solicitor raise fee by agreed percentage
• what percentages can solicitors raise their usual fee by for a success fee?

  -100%

  -capped at 25% for personal injury cases
• what does ATE insurance do if you lose your case?

  pays your opponent's legal fees & you usually don't pay anything back
• give the 2 case examples evidencing problems with conditional fee agreements

  -Motto v Trafigura 2011

  -Coventry v Lawrence (No. 2) 2014
• what happened in Motto v Trafigura 2011?

  -Biggest legal costs case

  Case: 30,000 Africans sued contractor after toxic waste dumping

  Settlement: £30 mil damages & D to pay C's legal costs

  Costs to pay: £105 mil, 100% solicitor success fee & £9 mil ATE insurance

  Challenge: D disputed

  Outcome: costs cut by 40%
• what happened in Coventry v Lawrence (no. 2) 2014?

  -Cost controversy

  case: homeowners won nuisance claim over noisy speedway track

  Settlement: £74,000

  Costs for D: £640,000 = success fee & ATE insurance

  Outcome: SC suggested this may breach ART 6
• what is the other type of no win, no fee agreement?

  damages based agreement
• what is a damages based agreement?

  lawyers receive share of award or damages
• when does the claimant have to pay the lawyer?

  only if claim is successful, if not lawyer doesn't get anything
• what percentages can lawyers receive if claimant wins case?

  -up to 25% personal injury claims

  -up to 35% employment claims

  -up to 50% all other civil cases
• what has now been brought in as a result of these two cases?

  -even if client wins they pay success fee themselves

  -losing party never pays winner's success fee
• give the advantages of no win no fee

  -no cost to state

  -widens access to justice

  -encourages lawyers to perform better as have financial interest in winning
• give the disadvantages of no win no fee

  -low take-up rate

  -in reality there are still costs

  -lawyers heavily focused on financial outcome

  -risky, uncertain cases won't be taken on