The short answer is no, it is not the same as free legal services such as legal aid or ‘pro bono’ services. The main purpose of ‘no win, no fee’ is to provide access to justice by removing the upfront costs and many of the risks.
No win, no fee is most common for compensation legal services as there is a party who can pay the fees if the case is successful. For this reason, it is less common for areas of law such as defense lawyers where the client may not have the means to pay if they win.
Due to the complex nature of compensation law, it would be very expensive for individuals to fund their own legal fees upfront, especially as their income levels may have been reduced due to injury. With ‘No win, no fee’ arrangements, the law firm covers the costs during the claim and only charges legal fees if successful. In the case of compensation cases, fees are deducted from the compensation before being paid out.
Example: Joe was injured in a car accident and secures a settlement of $135,000. He paid no fees upfront so his legal fees of $34,000 get deducted from his settlement before he receives it. Joe receives a lump-sum of $131,000.
If a ‘no win, no fee’ case is not successful then no legal fees are charged.
Example: Amanda was injured and opens a public liability compensation claim for a slip in a restaurant on a no win, no fee basis. The matter is opened and initial investigations are conducted by her legal team. It is discovered that the restaurant was not at fault or negligent and therefore a claim is not possible. The case has to be closed and no fees are charged. In this situation Amanda has not been able to claim compensation but has had the matter investigated and checked her rights at no cost.
Example: Dave has a work injury claim that does not settle out of court with the insurers. The case goes to court and is not successful. While Dave does not have to pay the legal costs of his own lawyers, he is made liable for the insurance companies legal costs. His legal firm may also charge for other outlays they incurred during the claim such as expert medical reports.
It’s important to get advice for your specific situation. Check if you can make a risk-free compensation claim and get free initial advice from our Principal lawyer, Greg Smith.
No win, no fee' sounds simple but there may be risks in the terms & conditions. Find out the main risks to look out for and how to avoid them.