No Win, No Fee Arrangements

At Northside Lawyers, we don’t like to offer ‘No Win, No Fee’ arrangements at all.

Firstly, it is not lawful for lawyers to offer no win no fee arrangements in relation to Family Law or Criminal Law matters, so no lawyers will be offering this to you in these areas of the law.

Like some lawyers we may offer what is known as a ‘deferred payment arrangement’ in certain types of matters, but this is very different to a No Win, No Fee arrangement.

See the FAQs for more on deferred payment arrangements or take advantage of our free first interview and come in and speak with us about this.

There are good reasons why we do not offer No Win, No Fee arrangements and the primary one is that it is very much more expensive for the client to enter into a No Win, No Fee arrangement than a deferred payment arrangement.

No Win, No Fee arrangements can, we agree, be suitable in some limited circumstances, but before entering in to them you should be most careful to understand the exact arrangement and what the full costs to you could be, whether you win or lose.

There are some reputable lawyers who do offer No Win, No Fee arrangements and in some limited circumstances it is probably the only way forward for the client.

With No Win, No Fee, if you lose then you do not have to pay anything, right?

Well no, this is not right. If you lose you normally have to pay the legal costs of the other party.

You may be told that if you are not ‘successful’ then you don’t have to pay your lawyer for the work done by them, so you have to look very carefully at what they say in the agreement is considered a ‘success’. It might not be what you are thinking as ‘successful’. If they succeed in getting you one dollar is that success? I recommend you look this one up carefully.

It is often true that you do not have to pay your lawyer for your legal fees if you lose, however you should understand what ‘lose’ means in their agreement. Losing might not be what you are thinking is meant by ‘losing’ in ordinary language. If you win your case and get paid some money from which you then have to pay not only your legal costs but also the uplift factor on the No Win, No Fee arrangement, you might not be left with much at all and perhaps with nothing – would you still feel that you had ‘won’?.

Win or lose there are still other costs that you may have to pay such as certain expenditures in relation to your case as you go along. Lawyers call these costs ‘disbursements’, not ‘fees’.

Disbursements include costs such as:

• court filing fees,
• court fees as the matter progresses
• fees for medical or other expert reports.

So, No Win, No Fee does not normally mean that you pay nothing at all if you lose.

The big issue – the uplift factor

The agreement that you sign may already include your No Win, No Fee lawyer charging you more than the base scale rate.

On top of this the No Win, No Fee lawyer normally charges an additional ‘uplift factor’.

If you ‘win’ or ‘succeed’ you are highly likely to have to pay that ‘uplift factor’ (also called ‘success fee’) whereby the lawyer charges an additional extra % of the agreed fee.

You don’t often see the uplift factor referred to on the web pages – so make a special point of asking about this because normal lawyers charge no uplift factor.

We have been told that uplift factors of an additional 20% on top of the normal charge are common. So, you must pay 20% more than the lawyer’s base fee that you have agreed to pay.

There are good reasons why a lawyer might charge an uplift factor and that is because the lawyer is taking the commercial risk of getting paid nothing if you were to receive nothing. But really, you might wonder what was the risk that you were not going to win something?

So, a No Win, No Fee arrangement might suit you in limited circumstances but if there is a strong chance that you are going to succeed then, like Northside Lawyers, many lawyers will consider you suitable for a deferred payment arrangement.