Are Traditional ‘No Win No Fee’ Agreements Really Gone?

Prior to the Jackson Reforms being implemented in 2013, a Conditional Fee Agreement (also known as a ‘no win no fee’ agreement) was a contract between a solicitor and their client that operated on the basis that if the client was successful in the case that they were pursuing, the solicitor would be entitled to charge the client for the time incurred in pursuing the matter, a success fee on those costs (set at a figure of between 0% and 100% dependent on the risks associated with the case), VAT and disbursements.

If the case was lost, however, the client would pay the solicitor nothing in respect of the time spent on the matter or the success fee. The success fee was, however, recoverable from the opponent in the dispute in the event of a successful claim and so, whilst the client was liable for the success fee contractual, in the main the client did not have to pay it due to them being indemnified by the opponent.

In 2013, this changed in a very simple way in operation but very dramatic way in practice. The Jackson Reforms removed the prospect of recovering the success fee from the opponent…or so we thought!

Bullock v Denton and Willoughby

In April 2020, the case of Bullock v Denton and Willoughby was heard. Mr Denton was a relatively wealthy gentleman, who died at the age of 56, leaving his estate worth in excess of £2 million to his brother. Mr Denton had resided with his partner, Mrs Bullock, at the date of his death for in excess of three years. This is classic case where there was a dispute between the deceased’ brother and Mrs Bullock about whether she was in a relationship with the deceased or rather that she was, as the brother alleged, merely a housekeeper.

The Court established that Mrs Bullock was in a long term relationship with the deceased but that is not the interesting part of the case. Under the Inheritance (Provision for family and dependents) Act 1975, the Court must take into account the factors set out at Section 3 of the Act. One of the criteria for the Court to take into account in this regard is:

the financial resources and financial needs which the applicant has or is likely to have in the foreseeable future’.

Mrs Bullock’s legal team ran the rather novel argument that one of the liabilities that the Court should take into account in this regard is the Claimant’s liability to pay the success fee, which would dramatically reduce the level of compensation Mrs Bullock would receive. This argument was accepted by HHJ Gosnell and accordingly part of the award made represented £25,000 towards the success fee that Mrs Bullock was liable to pay under the ‘no win no fee’ agreement.

Given this new approach of the Court (which in the writer’s view is the correct approach), it may now be possible to recover success fees in respect of claims pursued under the 1975 Act and potentially could by extension be used to recover a contribution to any after the event insurance policy put in place to protect the Claimant from adverse costs and disbursements.

Bullock Denton WilloughbyHow Nelsons can help

Kevin Modiri is a Partner in our expert Inheritance Disputes team.

If you have any queries in relation to the subjects discussed in this article, please get in touch with Kevin or another member of the team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.

 

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