In the United Kingdom, the vast majority of personal injury cases are processed by way of a ‘conditional fee agreement’, otherwise known as a ‘no win, no fee’ agreement. ‘No win, no fee’ was introduced with the Legal Services Act 1990, and it was introduced into courts in England and Wales in 1995. Over the last twenty years, ‘no win, no fee’ has become the default agreement for personal injury claims, due to the benefits it offers to the claimant.
Under a ‘no win, no fee’ agreement, the claimant does not have to pay their lawyer any money out of their own pocket.
This means that there are no legal fees to pay upfront nor during the claims process. Instead, a lawyer only takes payment when a claim ends; and only if their claim is successful.
You can find out more about no win, no fee at https://ukclaimlawyers.co.uk/.
So how do lawyers get paid?
Providing that a lawyer wins their client’s case, the lawyer can recover their costs in one of two ways: They can either recover their costs from the other side – or, they can take a percentage of the compensation that has been awarded to their client.
If a lawyer can recover their costs from the other side, then you will receive 100 per cent of your compensation. This is the preferred option for all parties. However, it is not always possible to do this, and so it may be the case that your lawyer takes a percentage of your financial compensation as payment. By law, this cannot be more than 25 per cent of the settlement demand. So on an £8,000.00 claim, a lawyer would be able to take a maximum £2,000.00 as payment for their services. It is also important to point of that many lawyers take less than 25 per cent; although the best lawyers tend to take the maximum percentage.
What if I am unhappy with the percentage?
It is absolutely crucial that you understand the percentage that your lawyer will take from your compensation before you sign anything. You should ask your lawyer what fee they will take before you agree to go ahead. However, it is also important to remember that the best lawyers do usually take a higher percentage. So you will have to weigh up whether it is worth paying more for a fantastic lawyer, or less for an average lawyer.
It may be possible also for your lawyer to reduce their percentage by recovering some of their costs from the other side. For example, it is sometimes possible for a lawyer to recover 50 per cent of their fee from the other side which will leave you with more compensation.