How do no Win No Fee companies make a profit?
Let's talk about the No Win No Fees basis. It's all over the papers. I think it's probably quite a good thing. In a nutshell what it means is that people can sue without having that awful stress of "Oh my goodness, if I go through this process and I don't win, it's all over the papers and I've got all of this expense. And I can't afford legal services and I can't afford to pay the bills. But I don't really know what I'm doing." Some law firms belong to a scheme where by they will say to you, "Look you've got a good claim. We've had a look at the papers. We think that you might win. So why don't we take the risk from you, we will give you advice at the outset. We'll represent you in court. And if you win, then the defendant will be told, will be ordered to pay all fees, so no loss there. Takes the risk off you. But if you win we'll take a cut of your winnings." And that is it in a nutshell. But if you're going to take the benefit of this great scheme, then you need to make sure that you speak to your solicitor about some form of insurance. You might ask, "Oh my goodness, why the realms of insurance here? What do I need insurance for?" You need insurance in case you don't win that case. Because who is going to pay the other sides legal fees? Well, the answer is you, if you don't win. And so it's all very well having a great case if you win the amount you receive covers all the cost and you don't get as much as you would have done normally. But nobody has lost. But if you lose, the last thing you want is to be ordered to pay the defendants costs. And that your solicitor will be able to help you get insurance to cover that eventuality.
