A solicitor has offered to take your case on "no win, no fee". It sounds like free representation: lose, and you pay nothing. The reality often includes hidden fees, insurance costs, and pushy marketing, which makes these deals less risk-free than they sound.
The reasons come down to a gap between what you want from your case and what pays your lawyer. Here is what to look for before you sign, and the traps to avoid.
How does no win, no fee work?
No win, no fee exists across the legal profession. But, it's most prevalent in personal injury claims, medical negligence, and housing disrepair, as these claims serve those less likely to have the money on hand to pay up-front legal costs.
Crucially, there are two different types of arrangement which are described by the phrase 'no win, no fee':
Conditional Fee Agreements (CFAs)
- You pay your lawyer's hourly rate plus a "success fee" if you win.
- The success fee, also called uplift, is a bonus based on your lawyer's costs, not your compensation.
- The uplift is capped at 100% of your lawyer's base costs. In personal injury cases at first instance, there's a further cap: 25% of your general damages and past financial losses.
Damages-Based Agreements (DBAs)
- Instead of hourly billing, your lawyer charges a percentage of whatever compensation you recover.
- That percentage is capped by law. The Damages-Based Agreements Regulations 2013 set a ceiling of 25% in personal injury claims, 35% in employment tribunal claims, and 50% in other civil claims, in each case including VAT. So 50% is a legal maximum, not the going rate.
- If you win £10,000 under a 30% DBA, your lawyer takes £3,000 and you keep £7,000.
In practice, you are more likely to see CFA, as law firms struggle to be as profitable within the regulations of the DBAs. Also, in areas where you can claim your costs back from the other party, CFAs ensure that you have calculated those costs.
Who pays when you lose a no win, no fee case?
Many no win, no fee cases involve After-the-Event (ATE) insurance, though it isn't compulsory.
In case your claim fails, this insurance covers the risk of paying the opposing side's legal costs (and sometimes your own legal costs too). The premiums for ATE insurance can be fixed, variable, or even a percentage of the claim value, and range from £100, to upwards of £1,000. They also vary depending on the estimated odds of success, claim type, and amount of cover requested.
Although your lawyer will typically be arranging your ATE insurance for you, it's important to be aware of any fine print. Common terms include requiring you to be honest, cooperate with solicitors, and accept any reasonable settlement offers.
Where does no win, no fee come from?
No win, no fee options were designed to replace the system for legal representation funding established by the Legal Aid and Advice Act 1949, a part of social welfare policy. At that time, the state would fund legal representation for those who could not afford it in nearly all criminal or civil cases.
As part of the cost-cutting neoliberal reforms of the 1980s and 1990s, eligibility for aid was cut and eventually privatised. Taking its place were CFAs, introduced by the Courts and Legal Services Act 1990, and expanded in 1999 so they could be used in most civil cases (though not family law).
This fee structure is now commonplace.
What to look for in a good no win, no fee deal
Done properly, no win, no fee services can improve access to justice. Look for providers who offer:
- Complete coverage. All court fees, representation costs, other fees should be included. You should pay nothing, regardless of the claim's success.
- Clear charges. No hidden insurance premiums, loans, or interest.
- Straightforward terms. It is your lawyer's job to ensure you understand everything. No jargon, complex terms, or "don't worry about it"s.
- Proper case checks. A proper assessment of your chances should be done before you're encouraged to bring a claim.
- Insurance clarity. It should be obvious who arranges the policy, who pays premiums, and what happens if anything is denied or disputed.
Housing claims have two structural features that make fair terms easier to offer than in higher-risk litigation. First, cases in the First-tier Tribunal (Property Chamber) and on the small claims track rarely end with an order making the losing side pay the other's legal costs. Second, the Tribunal doesn't require a barrister, so a provider can avoid the cost of counsel. A non-profit running these cases can pass those savings on, offering CFAs without the commercial pressure that compromises many private firms.
Common no win, no fee pitfalls to watch for
Not every provider lives up to the adverts. Here are the common pitfalls to watch for.
The hidden costs of CFAs
The 'no fee' only refers to your lawyer's fees. However, your case may generate a number of other expenses, known as disbursements. Your ATE insurance may cover these fees, but this is not always the case. Often, you'll be required to pay these regardless of whether you win. Disbursements can include:
- Court filing fees
- Barristers fees
- Costs for external reports, like medical experts or surveyors
- Expenses for obtaining official reports like doctors records or police reports
These 'hidden' costs can accumulate to thousands of pounds, shifting a great deal of risk back onto you.
Crucially, in order to cover these costs, some firms will also offer special loans.
Tread carefully here, as in spite of their helpful appearance, these loans can create a real conflict of interest. These loans generally carry high interest rates that continue to accrue until the case is settled. Your solicitor becomes your creditor, and now has a financial interest in recovering loan interest, which might not always align with your best interests in resolving your matter.
Will a paralegal handle my no win, no fee case?
The business model for many no win, no fee firms is based upon juggling a large volume of cases, so that the winners can offset the financial risk of any cases they lose. This factory-style approach to legal work inevitably leads to a poorer experience.
In particular, you might find:
- A lack of access to your solicitor. Your case may be handled primarily by junior paralegals or administrative staff.
- Poor communication. With so many cases to juggle, updates can become slow. You may find yourself chasing repeatedly, or waiting weeks for a response.
- Reduced strategic focus. If spread too thin, your lawyer cannot provide the personalised strategy your case may require, potentially leading to generic guidance or missed opportunities.
Can my solicitor pressure me to settle early?
As a client, your primary goal is to get the right outcome, as quickly and painlessly as possible. Unfortunately, the financial incentives impacting your lawyer can establish two powerful pressures that will directly affect you: aggressive case selection and incentives for early settlement.
- Cherry-picking cases: Because the firm only gets paid on successful claims, they are incentivised to focus their attention only on those cases with the best chances of winning, and those with the least perceived effort to get to that win. Cases viewed as complex, borderline, or requiring a protracted battle are often rejected, even if they hold plenty of merit. That leaves many valid claims without the representation they deserve.
- Pressure to settle for less: A quick settlement is more profitable for a firm than a long fight for a better award. Solicitors often encourage their clients to accept early settlement offers. Sometimes these offers are reasonable, but still don't represent the full expected value of your claim. This pressure ensures the firm gets a swift, guaranteed payment, to the detriment of their clients.
When no win, no fee arrangements go wrong
In the worst cases, these arrangements can leave clients worse off than if they had never signed.
Claim farming
Some lawyers pursue volume over quality to such a great extent they hire services to help them source clients. This is commonly known as claim farming in the industry.
Claims farmer [noun] - a middleman who encourages people to make compensation claims and who then sells these claims on to a lawyer (Collins Dictionary)
You've witnessed this if you've ever received a call inquiring if you've been involved in an accident, or received a flyer through your door inquiring after mould or damp in your property.
Prospective claimants are enticed by the promise of compensation requiring minimal effort. Fraud concerns arise here, when incidents can be fabricated, or exaggerated. Worse yet, claims are even occasionally made without the knowledge or consent of the claimant.
What happens if my solicitor drops my case?
Solicitors sometimes back out, leaving their clients behind with consequences that weren't apparent when they signed up. Withdrawal is most often when cases become more complex than anticipated, or prospects of success diminish.
Only at this point, do people discover they're personally on the hook for costs already incurred.
If the case has progressed, clients may also struggle to find alternative representation. The timing can be especially damaging close to a limitation deadline or during active litigation.
Withdrawal isn't only the firm's to trigger, though. You can end a no win, no fee agreement too. If you signed it at home, online or over the phone, you usually have a 14-day cooling-off right under the Consumer Contracts Regulations 2013, and if the firm never told you about that right the window can stretch to 12 months and 14 days. Cancelling inside it is not automatically free, though. Where work has already started at your request, the firm can charge a proportionate amount for what it has done. After the window closes, leaving is governed by the agreement's own termination clause, which can still leave you owing the costs run up so far.
What if my ATE insurer refuses to pay out?
Insurance generally requires a greater than 50% chance of success. This creates a tension: cases with borderline prospects are either rejected, or accepted based on overly optimistic projections.
Lawyers don't have the same incentives as the insurer, which can lead to a case being presented overly favourably and expose the client to financial risk later.
Even with the right insurance, financial risks still exist. Insurers can dispute coverage, particularly if they believe the case never met the 50% success threshold. Some solicitors shift this liability onto clients, claiming inadequate evidence or cooperation affected the case's prospects.
When such situations arise, clients need to pursue complaints through the Legal Ombudsman, a process that can take months. Even successful complaints may not fully restore clients' financial position, particularly when solicitors lack adequate professional indemnity insurance or have ceased trading.
What is the future of no win, no fee arrangements?
In June 2025, the Civil Justice Council published its final report on the funding of civil litigation. Among its 58 recommendations was replacing CFAs and DBAs with a single, simpler set of rules. The government responded in December 2025, but accepted only the recommendations on third-party litigation funding and left the CFA and DBA reform under consideration. Nothing on it made the May 2026 King's Speech, so the current rules still stand. And even if that reform happens, it wouldn't resolve the core tension at play here.
The challenge is that you want a just outcome, protected from costs and risk, while your lawyer still needs to profit, typically by minimising their time or maximising their cut.
We believe the greatest opportunity for better client outcomes is via technology as a means to alleviate these tensions.
Task automation opens time for solicitors to dedicate more attention to each client. It lowers operational costs, and offers an alternative route to maintaining profitability, without the financial pressure that currently incentivises quick settlements or factory approaches to client experience.
Better yet, directly connecting clients to the right information and tools could eliminate solicitor involvement in straightforward disputes entirely. Self-service platforms for simple claims would remove both the costs and contractual complexities that characterise current no win, no fee arrangements.
For either scenario, contract transparency is also a crucial area for improvement. Technology can help translate CFA agreements into plain English, flag potential risks, and explain your circumstances in a manner anyone could understand.
If you've been offered a no win, no fee deal and you're not sure what you'd actually pay, Remedy can read the agreement with you and set out the costs, the insurance and the exit terms in plain English before you sign anything.
