Are No-Win, No-Fee Solicitors worth using and What’s The Catch?
The CRISAS team often get asked for our views on finding a solicitor who will take on their claim against the installers who filled their homes with insulation which has since led to serious damage to their property, which can cost tens of thousands to put right.
Are All No-Win, No-Fee Solicitors Bad?
Some of the No-Win, No-Fee law firms have garnered a bad reputation over these last few years and are often spoken of poorly and in the same terms as some insurance or car salespeople. People do not know what is the best way to go, who to trust or who to go to for help.
In reality, this is somewhat unfair and it is not generally the law firms that are the problem, most of them are professional and very good at what they do and I would not discount the idea of approaching one of these lawyers to help you make a claim.
Law firms are highly restricted in the how they can receive and generate business and most solicitors take cases from independent claims companies. It is these claims companies, who generate the leads for the solicitors that drive us nuts with their incessant automated phone calls, texts and bombardment of adverts everywhere we look.
The continual pestering and unscrupulous methods used by some of these claims companies, trying to convince us to take out a claim for PPI, a poor holiday experience, or personal injury has given the industry a bad reputation.
It must also be said that some of these claim companies have definitely helped to propagate the ‘where there is blame, there is a claim’ culture which is not a good thing in my opinion.
However, with the demise of legal aid, it has to be said that they have helped millions of people with genuine claims, receive damages and compensation from companies and corporations that they would not have got, had these solicitors not offered this service. For many victims, it is the only way they have of taking any sort of legal recourse against these companies.
We are not going to go into the politics of how the government felt it was, in anyway, right to stop legal aid as that would start me on an off-topic rant about all manner of unbelievably stupid policies and cutbacks that beggar belief.
Do I Have To Use a No-Win, No-Fee Company?
You have 2 options when you want to make a claim. You can either employ the services of a solicitor or, if they offer it, use a conditional fee arrangement (CFA) more commonly known as ‘no-win, no-fee’ (NWNF)
If you decide to pay for the services of a solicitor then, most of them will require a pretty hefty upfront payment ‘on account’ to begin work. Some will also charge you for the initial consultation.
During the process there will be a number of people working on your case. From paralegals and trainee solicitors to solicitors with 8 years experience and sometimes, even specialist barristers. Their hourly rates are fixed and you will be charged for the work that each of them do while working on your case. These fees can soon mount up.
You will also have to pay your family or local solicitor whether you win or lose!
If you are unable to pay or unwilling to take the risk of losing the case, then the conditional fee arrangement is your best option.
Could I use my Local or Family Solicitor
Yes you can but, in my opinion, you are much better to use a company that specialise in CWI claims. A solicitor that has run dozens or hundreds of cases has a much better chance of success than a solicitor who has not had experience in dealing with CWI claims.
Legal Expense Insurance
It might be worth checking your own insurance as you may already have a policy that will include legal expense insurance and may well cover your legal costs to make a claim. In our experience, unfortunately, very few people have cover to take action against the company who made such a mess of installing your cavity wall insulation claims but it is worth checking.
What is a Conditional Fee Arrangement (CFA)?
A conditional fee arrangement, more commonly known as a ‘no-win, no-fee’ agreement is an agreement between a solicitor and a client. The law firm agrees that the client will only have to pay for the work they do if the case is won and damages are awarded.
If the claim is unsuccessful, you will not be left with a huge legal bill. The caveat is that, if you win, you will have to pay a ‘success fee’ of up to a maximum of 25% and, if it is taken out, the premium for the after the event (ATE) insurance. This is because the since April 2013 the success fee element of the costs can no longer be recovered.
What is After The Event Insurance (ATE)
After the Event Insurance is an insurance policy that is taken out to cover the costs should your claim be unsuccessful.
If you lose the case then the CFA covers the fees for the work carried out by your solicitors and the ATE covers the costs of your opponents legals costs as well as the disbursements associated with the case such as the surveys, medical examinations as well as the ATE premium.
If you win then the premium is deducted from your compensation award along with the solicitors success fee.
The combination of the CFA and ATE will ensure that you do not have to put your hand in your pocket. You will not have to pay anything if you lose the case. Hence the term no win, no fee 🙂
Do I have To Take Out ATE?
No, this is not a requirement and, you may feel that your case is strong enough that you are prepared to take the risk.
Also, you do not have to take the ATE provider suggested by your solicitor, you can, if you prefer, shop around and choose your own.
If you do not take out ATE and you lose, you will be faced with the costs from the other side which can run in to many thousands of pounds.
What Are My Chances Of Winning My Case?
No one can accurately predict the outcome of a case. It depends on the evidence you have and how hard the opposition wants to fight it. There are so many things to consider, But, when you enter into a CFA, the solicitor is taking a lot of the financial risk as he does not get paid if they lose!
One of the benefits of going down the CFA route, is that the solicitor will have assessed the strength of your case and will be of the opinion that they have a high chance of success. Also, if the ATE insurance company has agreed to insure your disbursement costs then you can be even more confident of a positive outcome because they will also have weighed up the risks of your case beforehand.
Another point, is that they only get paid when you win your award so it is in their interests to get the case settled as fast as they can.
A lot of these cases are negotiated and settled before they get into a courtroom. As the solicitor takes a percentage of the damages, it is also in their interests to ensure that work hard to negotiate the best deal for you.
How Does The Claims Process Work?
The basic details of your claim are passed to a firm of solicitors who will decide whether they are prepared to take on the claim.
If they accept it then the next step is for you to sign the conditional fee agreement (CFA) agreement and, in most cases a consumer credit agreement (CCA) to fund the upfront and ongoing disbursements for case.
Once the funding is in place then the solicitor will instruct a surveyor to carry out a full inspection of the property and a full costings schedule.
Armed with this information, the solicitor will then start legal process against the installer or their public liability insurer if the installation company is no longer trading.
Each law firm deals with the claims process in their own way but the best ones we have found are extremely aggressive in their approach. They will file papers with the court as soon as possible to force the company to either put in their defence or begin negotiations.
As we have already mentioned, if there is strong evidence that the installer is at fault, and it is clear that they have little chance of a successful defense then they would be stupid to go to the expense of trying to fight it through the courts.
Once the damages and compensation have been agreed and settled by the other party, the solicitor will take their success fee and the ATE premium and the balance is paid direct to you.
What Is A Consumer Credit Agreement And Why Do I Need To Sign One?
A consumer credit agreement is basically a loan agreement and it is required to fund the upfront and ongoing costs of the case.
There are a number of costs that are associated with the claim. These have to funded and to do this they use a CCA from a legal funder.
The solicitor will draw down the monies from the funder, in stages, as required. These funds are used to cover disbursements like the surveyor who needs to compile a property assessment report, where he will confirm that the damage has been caused by the cavity wall insulation and produce a complete cost schedule to cover the costs to remove the CWI and repair the damage as well as, any medical examination and payments required by the court to file the papers.
Unlike a traditional loan agreement, it should not go against your credit rating and no payments have to be made until the claim is concluded and the money that has been drawn down is repaid to the funder from your damages once the case is settled.
The monies that are paid using this money should be covered by the losing party who will pay back any disbursements and other 3rd party expenses that have been incurred on your behalf to support your case or the ATE provider.
What If I Lose The Case?
Remember this is a no win, no fee agreement so, in the event that you lose, under the terms of the CFA you will not have to pay any of your solicitors legal costs and neither will you be liable to pay any of the other parties legal costs or expenses as this will be covered by the ATE.
The exceptions to this are:
- You have lied, been dishonest or withheld information relevant to your case
- It is found that you are only claiming to financially benefit somebody else
- You did not have any reasonable grounds to make a claim in the first place
- The claim was shown to be an exploitation of the court and its procedures
You may still need to reimburse any expenses incurred by your solicitor during the case, subject to the conditions of your CFA. However such disbursements may be recoverable through a legal expense insurance policy.
In summary, I think that reputable solicitors that offer a no win, no fee option can help you get your home back and it is a good idea to speak with them to find out if they can help you and what they think the chances of a successful outcome will be.
It might not be the answer for everyone, but for most of us, I think that they provide a valuable service to a lot of people in need.
Important Information and Disclaimer
I am NOT a solicitor or a financial consultant. This article is for information purposes only and is meant to be used as a guide and not legal advice. It is strongly recommended that you take proper, independent legal advice from qualified experts.
Each law firm use their own CFA and may also use different funding methods. It is important that you take the time to read any agreement and take professional advice to ensure that you fully understand what it is you are entering into before signing any legally binding agreement.
As always we are here to help and advise. If you have any questions related to this article or the no win, no fee services then use our contact form and we will do what we can to help.