No win, no fee agreements explained

"No win, no fee" is one of the most widely advertised phrases in UK legal services, and also one of the most commonly misunderstood. It sounds like a simple promise — if you lose, it costs nothing — and in large part that is true, but the detail matters, particularly around what happens if the case does succeed, and what "no fee" does and does not actually cover.

The formal name for the most common version of this arrangement is a conditional fee agreement, or CFA. Under a CFA, a solicitor agrees to take on a case where their own fee becomes payable only if the case succeeds — hence "no win, no fee." If the case is lost, the client generally does not have to pay the solicitor's own legal fees. That is the core of the arrangement, and it is genuinely a significant shift of financial risk onto the solicitor, which is part of why solicitors typically only take on CFA cases they judge to have a reasonable prospect of success in the first place — a CFA is not automatically available for every case regardless of its merits.

Where it gets more nuanced is what happens if the case wins. On success, the solicitor is paid their standard fee for the work done, calculated in the ordinary way, plus an additional success fee — an uplift on top of the normal fee, which exists to compensate the solicitor for having taken on the financial risk of working the case for free if it had failed. Since the Legal Aid, Sentencing and Punishment of Offenders Act 2012 came into force in April 2013, that success fee is no longer recovered from the losing side as it sometimes was previously — instead, it is paid by the client, out of their own damages. In personal injury claims specifically, the success fee is capped by law at 25% of the damages awarded for pain, suffering and loss of amenity, plus damages for past losses such as lost earnings or past care costs to date — damages awarded for future losses, such as ongoing care needs, are excluded from that cap and are not available to fund the success fee. This cap is a legal maximum, not a target, and it is worth asking any solicitor directly, before signing a CFA, exactly what percentage they intend to charge and how it will be calculated against your specific award.

This is also where "no fee if you lose" needs a closer look, because the client's own legal fees are only part of the potential cost of litigation. If a case is lost, the client may still be liable for disbursements — costs like court fees, medical reports, or expert evidence obtained along the way — and, without appropriate insurance in place, potentially the other side's legal costs too. This is precisely why after-the-event insurance, commonly called ATE insurance, is often arranged alongside a CFA: it is a policy taken out after the dispute has already arisen, specifically to cover the risk of these costs if the case is ultimately lost. Whether ATE insurance is included, who pays the premium, and what it actually covers are all worth asking about clearly upfront, since "no win, no fee" without any mention of disbursements or adverse costs can understate the client's actual financial exposure if things do not go as hoped.

A related but distinct arrangement is a damages-based agreement, or DBA. Rather than a standard fee plus a success-fee uplift, a DBA gives the solicitor an agreed percentage of whatever is actually recovered if the case succeeds, with nothing payable if it does not. DBAs are less commonly used than CFAs for personal injury work specifically, but they exist as an alternative structure, with their own regulatory caps that vary by case type — 25% for personal injury, higher percentages for some other types of claim such as employment matters. The key practical difference from a CFA is how the eventual payment is calculated: a percentage of standard fees plus an uplift under a CFA, versus a straight percentage of the total recovery under a DBA.

None of this is a recommendation to pursue a claim, to use a CFA over a DBA, or of any specific firm. This article is general information, not legal advice. Whatever arrangement is offered, it is worth asking for the percentage or fee structure in writing, asking specifically what happens to disbursements and the other side's costs if the case is lost, and confirming whether ATE insurance is included, before signing anything. Our directory lists solicitors who handle claims on this basis by area and specialism.

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