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Legal Case Funding not Explained? No After the Event Insurance? What to do About a Surprise Legal Bill

View profile for Jonathan Tyler
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A legal case you’ve been involved in has recently concluded. Maybe you were claiming money someone owed you, or claiming against a builder who had done a poor job causing you to suffer financial loss.

Your claim was not successful however, and you’ve now received a bill from the solicitor who dealt with your case. But it was nothing like you expected. In fact, you weren’t expecting a bill at all, because as far as you were concerned, you were funding your case on a conditional fee agreement which to you meant ‘no-win, no-fee”. To make matters worse, a friend just asked you if you’d had insurance to cover the costs of a no-win situation. But you didn’t know anything about such insurance. It had never been offered to you.

It appears as though you were not adequately informed. You may have a case to make a negligence claim against your solicitor. Let’s take a look at the facts.

Did your solicitor explain how their conditional fee agreement worked?

A conditional fee agreement (CFA), commonly known as a ‘no-win, no-fee’ means you don’t have to pay anything to your solicitor should your case prove unsuccessful.

When a conditional fee agreement is in place and a case is won and compensation received, the solicitor will claim their basic charges from the losing party and the client will pay to their solicitor , normally from their compensation, a success fee.

Where your case is lost, there is no requirement to pay any legal costs to your solicitor but you will normally be liable for your opponent’s legal costs or expenses. Your solicitor should have explained this to you as well as the fact that you will have to repay certain expenses incurred during the case, such as barrister or expert fees.  This should have been clearly set out in your agreement and explained to you.

The opponent’s costs and your own expenses however would usually be recoverable by you through a legal expenses insurance policy, otherwise known as ‘after the event insurance’.

Were you offered after the event insurance?

When a claim for compensation is not successful, a legal expenses insurance policy, or ‘after the event insurance’ (ATE), will protect the claimant from paying the opponent’s costs and the client’s own expenses. Whilst it is not a legal requirement to have a policy in place in order to go ahead with a claim, it is highly advisable, because without one you could be exposed to considerable and unnecessary financial risk.

A conditional fee agreement combined with after the event insurance provides complete protection to the claimant in the event of the claim being unsuccessful. The CFA means the solicitor’s fees are not payable, whilst the insurance covers the cost of the opponent’s legal fees together with all the expenses incurred, including the cost of the insurance. So, for the unsuccessful claimant, there should be nothing at all to pay.

Solicitors did not explain funding or offer insurance?

If your solicitor failed to adequately explain how your CFA worked, or did not offer you after the event insurance, then they could be deemed as having acted negligently, in which case you may be able to bring a claim against them for professional negligence and claim back the fees that you have been charged.

At Seth Lovis & Co. we regularly deal with a range of solicitor negligence claims, including those where solicitors have failed to properly explain how the funding of a claim works. We have in fact had excellent success in pursuing such claims, recouping the unexpected losses suffered by our clients.

If you would like to talk through your case with a member of our helpful, dedicated team, you can do so in complete confidence by calling 0207 2 4289 or by dropping us a line on