A no win no fee agreement, formally called a Conditional Fee Agreement (CFA), is a legal funding arrangement where you don’t pay your solicitor’s fees upfront. If you win, the solicitor is paid and may deduct a success fee from your compensation, depending on the agreement. The success fee is capped by law. If you lose, you generally do not pay your solicitor’s fees. However, you may still be responsible for certain expenses or costs unless insurance or other protections are in place.

At Thompson & Co Solicitors, most personal injury and medical negligence claims are handled under a CFA.This guide reflects the way Thompson & Co deals with claims under a CFA rather than being a generic summary of no win no fee arrangements.

What Is a No Win No Fee Agreement?

A CFA is a legal funding arrangement stating your solicitor is only paid their basic legal costs if your claim succeeds, and you won’t have to pay those costs if it fails – unless your claim is found by a court to be fundamentally dishonest, in which case the normal no win no fee protection no longer applies. 

If you win, you become liable for the solicitor’s costs and disbursements, a success fee, and, if insurance cover has been arranged for you, any non-recoverable portion of an After the Event (ATE) insurance premium that becomes payable at the end of the claim.  

You can usually recover part or most of the costs and disbursements from your opponent. You cannot recover the success fee or any non-recoverable insurance premium from your opponent. 

Depending on the type and value of your claim you may only be able to recover a fixed amount of costs towards your solicitor’s costs based on the amount of compensation recovered and the stage of the claims process your claim reaches. In medical negligence claims you can also usually recover part of the insurance premium from your opponent. Any shortfall in the costs and disbursements is deducted from your compensation although Thompson & Co. voluntarily cap this deduction at 25% of the compensation recovered. 

How Does No Win No Fee Actually Work?

• Case assessment: your solicitor assesses the strengths and weaknesses of your claim before agreeing to act under a CFA. They will usually only take it on if they believe it has a reasonable chance of success and reserve the right to withdraw from the CFA if they consider that the chances of success in the claim have fallen below 51%.
• Signing the CFA: The CFA document and Terms and Conditions sets out the success fee percentage and confirms how your solicitor’s fees will be calculated.
• Funding and insurance discussion: Thompson & Co explains all funding options that may be available to you including whether you may have any existing Legal Expenses Insurance that may cover your costs risk. If you do not already have suitable insurance cover they will also discuss the option of arranging an After the Event Insurance Policy to protect you against the risk of having to pay disbursements and your opponent’s costs if you win but do not beat an offer previously made by your opponent..
• Case building: documentary evidence, witness statements, and medical records are obtained. Medical experts and other expert reports are obtained as evidence in the claim. Disbursements are initially covered by the solicitor’s firm and recovered later from your opponent if you win, or the insurer if you lose.
• Negotiation or court proceedings: If settlement cannot be achieved by negotiation then Court Proceedings may be required to progress your claim depending on prospects of success..
• Case concludes: on success, the firm recovers part or all of its costs from the opponent and then deducts any unrecovered costs, the success fee, and any non-recoverable ATE insurance premium from your compensation, subject to the voluntary cap of 25%.
• Settlement breakdown: you receive a written account of deductions before your final balance is released.

What Happens if I Win My Case?

If your claim is successful you will be responsible for paying

 

• your solicitor’s basic legal fees; and
• any disbursements not recovered from your opponent; and
• your solicitor’s success fee; and
• The non-recoverable part of the premium for any After the Event Insurance Policy you may take out in your claim.

 

Your solicitor will usually be able to recover part or all of their costs and disbursements from your opponent along with any recoverable element of any After the Event Insurance Premium. In some cases you may be limited to only recovering a fixed amount of costs from your opponent. 

You cannot recover your solicitor’s success fee or any non-recoverable part of the After the Event Insurance Premium from your opponent, these must be paid by you out of any compensation recovered as well as any shortfall in costs and disbursements that your solicitor is unable to recover from your opponent. 

However, we agree to cap the total amount deducted from your compensation at a maximum of 25% of compensation recovered.

If you win your case but fail to recover more than an offer made by your opponent, you may become liable to pay the other side’s costs incurred after the offer expired out of any compensation, costs, and interest you recover. Insurance can be arranged to cover this specific risk.

What Happens If I Lose My Case?

If your claim is unsuccessful, you will not pay the solicitor’s basic legal fees. While you will still be responsible for disbursements such as medical report and court fees, these will usually be covered by After The Event insurance that the solicitor will arrange for you in the absence of you having any suitable existing insurance cover. You will not pay an ATE insurance Premium unless your claim is successful. 

You won’t normally have to pay the other side’s costs after losing – except where court proceedings have been started and the claim is struck out for disclosing no reasonable cause of action, or is found to be fraudulent or fundamentally dishonest.

Fundamental dishonesty is a serious risk worth flagging: if a court finds any part of your claim dishonest or exaggerated, your entire claim can be dismissed – even after a win – and you could become liable for both your own solicitor’s costs and the other side’s costs. 

What If I decide to Terminate the No Win No Fee Agreement before my Case is Ended?

In the event that you end the agreement before your case has been won or lost, your solicitor will decide whether to charge you for any work they have actually carried out on an hourly rate basis and for any expenses incurred. 

The Success Fee Explained

The success fee is only charged if you win and is capped at a maximum of 25% of the amounts recovered for general damages (pain and suffering) plus past financial losses and cannot be more than 100% of the solicitor’s basic charges. Compensation for future losses, such as future care costs or loss of earnings, is excluded from calculating the 25% cap.

At Thompson & Co, the success fee itself varies based on our view of the risks involved in your claim and the stage your claim reaches – for example, a CFA in a medical negligence claim may set the fee at 70% of basic charges if the claim settles before court proceedings a are started, rising to 100% if court proceedings become necessary. The success fee therefore differs case by case based on the assessed risk factors, including prospects of success and the stage the claim reaches.

No Win No Fee vs Traditional Hourly-Rate Legal Fees

Feature	No Win No Fee (CFA)	Traditional Hourly-Rate Fees
Upfront payment	None	Often required as a retainer
If case is lost	No basic fees owed, but disbursements may be payable unless insured	Full fees owed regardless of outcome
If case is won	Unrecovered basic fees, success fee, any disbursement shortfall, and non-recoverable ATE insurance premium deducted from compensation	Hourly rate charged throughout
Financial risk to client	Unless the client terminates the No Win No Fee agreement before the claim is concluded, limited to deductions of shortfall in costs, unrecovered disbursements and insurance premium which are payable from recovered compensation and capped at 25% of the compensation recovered.	Significant, ongoing cost exposure

Who Can Use a No Win No Fee Agreement?

CFAs are commonly used for all types of personal injury claim including road traffic accidents, workplace accidents, public liability, and industrial disease claims, as well as medical negligence claims where medical expert evidence costs are usually substantial. The solicitor assesses each case’s prospects of success – generally requiring prospects of success to be “greater than 50%” – before agreeing to act under a CFA.

Common Misconceptions About No Win No Fee

“No win no fee means completely free.” Not True – If you lose, you would still be responsible for disbursements such as medical report fees or court fees however we will usually make sure that suitable insurance cover is in place to cover these disbursements so that you do not have to pay them. You may also be responsible for paying your solicitor’s costs if you terminate the conditional fee agreement before your claim is concluded. 

“If I lose, I will face a bill for the other side’s costs.” Not True – You will usually only be responsible for paying your opponent’s costs if court proceedings have been started and your claim is then struck out or found to be fundamentally dishonest.

“The success fee always takes 25% of my whole payout.” Not True – the Success Fee is capped at 25% of general damages and past losses only, and future loss compensation is fully protected – but total deductions (success fee plus any cost shortfall) are voluntarily capped at 25% of total compensation by this firm.

“Winning guarantees full recovery of legal costs from the other side.” Not True – The only type of claim in which you can recover all of your legal costs, disbursement and ATE insurance premium from your opponent are claims for asbestos related mesothelioma. In most cases worth less than £100,000, fixed recoverable costs rules mean that it will usually not be possible to recover all of the costs incurred from your opponent. Even where fixed recoverable costs do not apply it is usually not possible to recover all of the legal costs from your opponent. A shortfall between what’s recovered and what costs have been incurred is common, and clients are liable for that gap. We cap the amount that you will pay at a maximum of 25% of recovered compensation.  

Frequently Asked Questions

What happens if I lose my case?
You won’t pay the solicitor’s basic legal fees but you may still owe disbursements although we will usually ensure you have suitable insurance cover in place to cover them. You won’t pay the other side’s costs unless court proceedings are started and your claim is struck out or your claim is found to be fundamentally dishonest.

How much is the success fee?
The success fee will vary depending on your solicitor’s views of the risks of the claim. However, it cannot be more than 25% of damages for general damages and past losses, and no more than 100% of the total basic charges. Future loss compensation is excluded from the cap.

Will I have to pay for ATE insurance if I lose?
No the insurance premium is self-insured.

Can I be liable for costs even if I technically win?
Yes – You can become liable to pay some costs out of your compensation if you reject a Part 36 offer made by your opponent and then go on to recover the same as or less than their offer, or accept the offer out of time, or if a costs order is made against you during an interim court application. We will usually  ensure you have suitable insurance cover in place to protect against this. 

What is fundamental dishonesty, and how does it affect a no win no fee claim?
If any part of your claim is found dishonest or exaggerated, the whole claim can be dismissed and you could be ordered to pay both sides’ costs, even after previously winning.

Can my solicitor refuse to take my case under no win no fee?
Yes, the firm assesses prospects of success – generally requiring them to be better than 50% – before offering a CFA.