The “no win no fee” concept, also known as the Conditional Fee Agreement (CFA), is an interesting development in the payment of legal services. Basically, in a this type of agreement, a lawyer does not receive any payment if the client does not win. On the other hand, if the lawyer successfully wins the case, there is an extra success fee added onto the typical hourly fee. “No win no fee” agreements are not allowed in cases of family or criminal law, but are very common in personal injury and medical negligence suits. This arrangement was first created to give people of lower socio-economic status access to the courts, since they may otherwise be unable to afford a lawyer. Additionally, there is the theory that the lawyers will work harder to win since that is the only way they will receive payment, and won’t take weak cases that would be a waste of time and finances if brought to the court.

This sounds great initially, but there are actually several drawbacks to using a CFA, largely because the payment within the legal system is much more complex and involves a great deal more than just the cost of a representative. First, there is what happens if the case is lost. Although the client does not have to pay the lawyer, he or she will still have to pay the costs of the opposing party. There are insurance policies against this risk, but in the end, payment to the insurance company will ultimately still be the client’s responsibility. Therefore, a loss does not mean the client does not lose money.

Then, there is what happens when the case is won. Winning a case is also quite complex. There may be appeals or more than one court proceeding involved. One particular situation that demands closer attention is if the other party makes a Part 36 Offer, basically a settlement before the case is heard. If the client refuses the amount being offered and then receives judgment of even less than that previously offered amount, he or she may actually have to pay the opposite party for forcing the case to continue in court when the opponent had already made a reasonable concession. What’s more, if the client refused the Part 36 Offer against the advice of the lawyer, the lawyer may also be entitled to payment. In other words, winning the case may actually be as costly as losing.

Lastly, there is the situation in which the case is settled before court, something that many people inexperienced to the legal system overlook. In this case, the lawyer again is entitled to payment, including the success fee.

This is not to say “no win no fee” agreements do not have their proper place in the legal system, but it is definitely to the client’s advantage no matter what to assess the strength of his or her case thoroughly and determine if there is a real benefit in working with a CFA solicitor.