The Telegraph's legal expert, Solicitor Advocate Frank Maguire of Thompsons Solicitors is an expert at winning compensation for clients in personal injury cases. This week he explains how some No Win No Fee arrangements can end up costing you a small fortune.
Most lawyers and claims organisations offer a No Win No Fee service but they are not all the same. Scratch the surface, and you will find that you can end up paying out huge sums of money.
No Win No Fee is supposed to protect you in the event of your claim being unsuccessful because you then have to pay the other side's costs.
Unsuccessful cases, however, are not the problem. The problem arises, when you win. And given that statistics show that 98% of cases are successful, the problem is a large one.
Claims organisations are generally happy to tell you about how their No Win No Fee service works when you lose. But what can happen when you win?
The answer is, they can take a large slice of your damages as fees. Very many No Win No Fee arrangements say that if a claim is successful the injured party must pay 25%, 30% or even 35% of their damages as fees.
So just think if you received £10,000 compensation you would have to immediately give the claims company £3,500 in fees. They would also get another £2,000 in fees from your insurance company.
Let me tell you a cautionary tale about a case I was involved in.
I represented the driver of a car which was involved in a car crash. His friend, the passenger, instructed a claims company.
Their injuries were very similar. I obtained £5,000 in compensation for my client and he kept all of the money.
His friend accepted the first offer of £4,000. The claims company kept £1,200 of that money and my client's friend therefore only received £2,800.
You should therefore be very careful when looking at offers of No Win No Fee from claims organisations and watch out for the sting in the tail.