Since the legal aid scheme was scrapped in the year 2000, no win no fee claims have become the most common method of recovering injury or illness compensation. This method relieves a lot of the stress and strain from making an injury compensation claim; with no win no fee solicitors working hard on the claimants behalf to recover compensation at no cost to them.
The general premise of a no win no fee claim (officially known as the ‘Conditional Fee Arrangement’) is that when a claim is made, regardless of its success, the person pursuing the claim never has to pay out any money. This system works by allowing the solicitor to recover their fee from the defendant’s insurance cover; therefore no amount is taken from the claimant’s compensation to pay for these costs, allowing them to recover 100% of their compensation.
If a claim is unsuccessful, the claimant is technically liable to pay the defendant’s costs (known as an ‘adverse cost order’). However, the claimant is usually protected against this by having their solicitor purchase an ‘After the Event Insurance’ or ATE; the cost of this purchase is reclaimed from the defendants if the claim is successful. An alternative to ATE insurance is ‘Legal Expenses Insurance’ (LEI), which is sometimes referred to as ‘Before the Event’ Insurance (BTE); this type of insurance is usually already held by the client, perhaps as part of home contents insurance or car insurance, and covers legal expenses as well as costs for pursuing injury claims.
