No-Win No-Fee agreements towards legal costs are considered as contingent costs agreements. They are being offered widely by lawyers as unique selling points in the competitive legal services market in pursuit and retention of clients. However, clients do not fully understand this agreement well before they enter into a contract with a legal team.This kind of a contingent cost agreement will enable a person with limited funds to gain access to justice. The agreement hints at the payment being a contingent one on the successful outcome of a case. The main idea behind this concept is that people who find it difficult to afford expensive legal fees are given an opportunity and are not prevented from filing claims.
However, we recently came across a case where a lady was presented with a legal charges bill towards costs nearing five thousand British Pounds by her legal firm after her personal injury claim was denied by a court. The bill was presented to her despite her proceeding with a `no win, no fee’ type of agreement. She was shocked to receive such a bill. The firm had agreed to these terms after taking out an ATE or after the event insurance on her behalf to cover the legal costs. This lady was under the impression that all the financial risks had been protected against. Upon investigation, it was discovered that this legal firm had not followed some conditions that it had formerly agreed to with this person and her insurer. They proceeded with the case despite being certain that there was less than even half a chance of being successful. When the case was lost, the insurance company declined to pay out. Consequently, the legal firm then tried to harass this client to pay for the mistakes that the firm had committed. The lady was mighty upset as she was quite clear that she would not have to pay anything even if she had lost the case. She was extremely worried about how she would be able to settle this bill. She approached the Legal Ombudsman online for help and they were able to resolve the dispute. Compensation after a accident or injury can help the victim with medical treatment. They managed to get the legal firm to honour their agreement and absorb the costs of their fees.
It is to be noted that such types of contingent costs agreements are common in litigation cases that involve claims of personal injury and disputes concerning wills and probates, but they are not allowed in family law and criminal cases. In any case, a client has to be very cautious to go through the fine print before entering into such types of contracts with a legal firm. The cost agreement of each lawyer may be unique despite being subject to rigid legislation. There are few things to be conscious of before entering into a contingent costs agreement.
The concept of `winning’ a case is defined broadly as a successful outcome after a court judgment. It may include a settlement for a far less amount than what was claimed. The `fees’ will generally relate to the professional charges of a lawyer and will not include all disbursements that are associated with litigations costs like court fees or an expert’s charges. When a case is lost, the client need not pay the lawyer’s professional fees but will have to pay the legal costs of the defendant. It has to be remembered that an agreement of the contingent cost type will not make litigation totally free of any charges. Clients have to be aware also of the fact that lawyers are allowed to charge an `uplift’ fee that can go as high as twenty five per cent of the legal costs and not disbursements. This increases the final amount that is paid to them in case of a successful result. This uplift fee is a compensation for the lawyer to assume the risk that a claim may fail without any fees being paid out.
As with any type of agreement, clients have to consider its contents judiciously and seek clarification before entering into a contract with a legal firm.