Telling the truth about SME life today

No-win, no-fee: ten need-to-knows

Law firms tend not to promote they offer conditional fee agreements for fear of jeopardising their income streams from large commercial clients who pay them by the hour. 

However, there are reputable law firms out there prepared to act for SMEs on a risk-sharing “no-win, no-fee” basis. If you’re thinking about pursuing a business dispute, consider the following points: 

  1. Get the right law firm to handle your dispute. It might sound obvious but this is where many businesses fall at the first hurdle. Many businesses often turn to a solicitor they first used when setting up their company or have previously used for a family matter, such as a will. While these solicitors will have delivered a solid service, they are unlikely to have the experience and resources to handle a commercial dispute. 
  2. Find a firm willing to act on a conditional fee agreement so that you can better manage your costs. These companies operate a bit like a dating agency and, on establishing the basic details of your potential case, will introduce you to one of the firms on their panel at no cost to you. 
  3. Understand that “no-win, no-fee” can, but doesn’t necessarily, mean “no cost”. Under a conditional fee agreement, a solicitor and a client agree to share the risk of the litigation by coming to a financial agreement on the fees payable based on the result of the case. 
  4. Know the costs involved before you proceed. At your first meeting with a solicitor, you will be told of all the charges and you should make sure you’re absolutely clear before deciding if you want to go ahead.
  5. Verbal promises do not make a case, evidence is required at the outset, otherwise no solicitor will take on your case. It is not good enough to say that it was a gentleman’s agreement or “she told me she would”.  
  6. The person you are in dispute with must have enough money to pay not only the damages owed to you but also your legal fees. It is a common misconception that a judge will make someone sell their house to settle a commercial dispute. A defendant is typically a company or an individual that has professional negligence insurance, and so has the wherewithal to withstand a judgment going against them. 
  7. Don?t expect that your case will go to court. The vast majority of cases are settled before they reach court. 
  8. If you are considering pursuing a dispute, act now before the rules change. Under reforms going through Parliament in the Legal Aid, Sentencing and Punishment of Offenders Bill, changes to the way solicitors are paid means that the number of solicitors willing to work on a CFA will likely reduce. 
  9. Don?t ever be afraid to ask questions of your solicitor that is what they are there for and you need to feel as comfortable with the process as possible. 
  10. It is simply not true that by signing up to a conditional fee agreement you will somehow get a “light” version of the law and a lesser service. Law firms only take on cases they believe they have a good chance of winning and will put their best people on them because they have a vested interest in the outcome. If they don’t win, they don’t get paid. 

Tina Morgan is a barrister and founder of John Kennedy Limited. Email: [email protected]


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