Smith-Jones

Legal Aid v. no win, no fee. What’s the difference?

If you find yourself in the position of needing professional legal advice, then one of the first questions you’re likely to ask yourself is how much it’s all going to cost.

As you might expect, legal charges will vary quite substantially between different firms, so it’s always advisable to shop around if you need to consult a solicitor. This will not only give you the opportunity to find the one you’re most comfortable with but will also enable you to compare costs. And remember – the cheapest option isn’t always the best (in fact, far from it!).

Depending on the type of matter you want to seek advice on, then you might be entitled to claim Legal Aid or instruct a solicitor on a “no win, no fee” basis. Of course, all this can be quite confusing, so in this article, we take a closer look at the key differences between the two and under what circumstances you might well be able to take advantage of the funding options available.

 

What options are available if I need to consult a solicitor?

 

If you use a solicitor or regulated law firm, then their fees and charges should always be as transparent as possible.

Typical fee options are as follows:

  • Fixed fee work
  • No win, no fee agreements
  • Legal Aid
  • Externally funded, g. through employers, insurance companies or trade unions
  • Pro bono support (i.e. free legal representation from voluntary organisations such as LawWorks or the Bar Pro Bono Unit)
  • The Citizens Advice Bureau

 

What is fixed fee work?

 

This is where your solicitor agrees to undertake the required work for you on a fixed fee basis. Whilst you’ll, therefore, be expected to pay for all the work in full, you should also have a very clear understanding of what the ultimate cost will be at each stage of the proceedings. For example, your solicitor might charge a set amount to send an initial letter of claim and thereafter charge you on an hourly basis. However, do remember that if you need to attend Court, your case might not necessarily be heard at the same time it’s listed for. In fact, in both the Magistrates and County Courts, a certain number of cases are listed at exactly the same time and are only dealt with as and when the Judge (or Magistrates) have finished the case before them. For this reason, any advocacy work undertaken by your solicitor should ideally be on a fixed rate basis and not per hour.

 

What are “No win, no fee” agreements

 

Generally speaking there are two types of “no win, no fee” agreements, although the actual basis of them are pretty much the same – that is to say that in both cases, your solicitor will only get paid if your case is successful. If you lose the claim, then your solicitor won’t get paid, and for this reason, fees are usually covered by a separate insurance policy. The two different types of “no win, no fee” agreements are known as either Conditional Fee Agreements (‘CFAs’) or Damages-Based Agreements (‘DBAs’).

Conditional Fee Agreements mean that, if your case is successful, you’ll receive 100{d0b33ffed4c839fc4b18c811774d92ca1331969f61d589721459b0764cff8e09} of any compensation awarded to you. However, your solicitor can then claim his or her costs, in addition to a pre-agreed ‘success fee’. This fee can be up to 100{d0b33ffed4c839fc4b18c811774d92ca1331969f61d589721459b0764cff8e09} of your solicitor’s costs, although in personal injury cases, is limited to just a percentage of the damages awarded. In this case, the losing party will have to pay your solicitor’s costs together with any other expenses which you might be liable for.

Given that this type of agreement means you have to pay the success fee, then it’s crucial that you’re fully aware of what this fee will be before you sign the agreement and start the legal proceedings. Remember that any type of “no win, no fee” agreement constitutes a legally binding agreement between you and your solicitor so the express terms of it should never be underestimated.

Under a CFA, if you lose your claim then you won’t receive any award, but nor will you pay your solicitor’s fee. The main thing to remain mindful of in this scenario is that you could well be ordered to pay your opponent’s costs, so the likelihood of this happening should always be discussed with your solicitor who should be able to advise you accordingly based on the evidence and facts you have in your favour.

The other type of “no win, no fee” arrangement is a Damages-Based Agreement (‘DBA’). These are also referred to as “contingency fee arrangements”.

These types of agreements differ from CFAs insofar as, if your case wins, then your solicitor will be paid by deducting a set percentage of the compensation you get awarded. Again, these rates will vary from firm to firm so always be sure to ask around and compare the different rates.

 

Additional costs to look out for

 

If you choose to instruct a solicitor under a Conditional Fee Agreement, then you might be asked if you want to take out an insurance policy known as After The Event (or ‘ATE’) insurance. The purpose of this policy is to cover your liability in the event that your claim is unsuccessful, thus exposing you to the risk of having to pay your opponent’s legal fees. Since 1st April 2013, any premiums paid under policies of this nature can’t be recovered from the losing opponent if your case wins so, regardless of the outcome, you still have to pay for the insurance.

In addition to insurance premiums, you may also be required to pay certain disbursements. These are basically any type of cost which isn’t directly incurred by your solicitor – for example, medical reports, search fees and court costs. Your solicitor will be able to advise you on what type of disbursements you might be expected to pay, and these will usually be payable up front.

 

What is Legal Aid?

 

Legal Aid is only available in certain circumstances, but you can obtain the latest information on it from the Solicitors Regulation Authority. [1]

The Legal Aid scheme is operated by the Legal Aid Agency, and those who are eligible for it can also use a free and confidential advice service called Civil Legal Advice. You can find out more about the service either via their website, www.gov.uk/civil-legal-advice or by contacting them directly on 0845 345 4345.

In order to qualify for Legal Aid, you will usually be required to meet certain criteria such as whether your case is eligible for Legal Aid, that the problem is of a serious nature and that you can’t afford to pay your own legal costs. Legal Aid is often used in cases such as domestic violence, family mediation, potential homelessness and discrimination. You also have the right to free legal advice if you’re questioned at a police station and will automatically get Legal Aid for representation in Court if you’re under the age of 16 or in receipt of certain benefits.

Whilst Legal Aid is often perceived as being a “free” benefit, it usually isn’t, and in fact, in the vast majority of cases, claimants will be required to pay a certain element of it back.

Legal Aid also provides exceptional case funding in the event you can prove that, being refused Legal Aid would infringe either your rights under the European Convention on Human rights or your EU rights to obtain legal representation.

 

Conclusion

 

As can be demonstrated then, whilst Legal Aid and “No win, no fee” are both very common sources of legal funding with a certain element of crossover, they each do very different things.

Put simply; Legal aid is basically a Government funding scheme which assists with the cost of legal advice for those who simply can’t afford it (although intended claimants will be asked to evidence this prior to being accepted for funding). In 2000, the Government removed the right to Legal Aid in personal injury cases and instead, the “no win, no fee” mechanism was set up to help potential litigants claim compensation and/or other types of loss, including damages.

Since then, there have been further changes – more notably in April 2013 when new legislation dictated that solicitor fees are not payable should a claimant lose their case.

Clearly then, there are certain pro’s and con’s relating to each type of funding option, and your solicitor will be able to advise on the best way forward, depending on the type of your case. Suffice it to say; whatever legal problem you’re faced with, there’s always a solution in terms of funding options.

 

References

[1] Solicitors Regulation Authority – https://www.sra.org.uk/consumers/using-solicitor/costs-legal-aid.page