No win No Fee HistoryNo win no fee has not always been available. Prior to 1995 you either had to pay for your case or you may have been able to get public funding through legal aid to help you pay for your case, you could only get this if you could genuinely not afford to pay for yourself. Legal aid only covered certain cases and you would have to pay them back from your damages. Legal aid cost the government millions of pounds and therefore in an attempt to save costs they allowed conditional fee agreements on a no win no fee basis and abolished legal aid in order to save them considerable amounts of money. A void then existed as to how these cases would be paid. Initially Claims Direct took advantage of the new system by taking 30% of your damages. Soon after they introduced the before the event legal insurance. This worked by the claimant taking out a loan of approximately £2200 which would fund the cost of the solicitor buying the case, approximately £400. The cost of the disbursements of approximately £700 and the cost of Claims Direct Management of approximately £100, the cost of the before the event insurance which was approximately £1100. In the event that further disbursements were required, the solicitor would draw down further on the loan. When the solicitor settled the case they would attempt to recover this outlay from the insurance company. What transpired is that initially the insurance companies paid but quickly resisted paying all the sum. Therefore it was not uncommon that the claimant would be awarded £1500 for a whiplash claim and end up with £50. The Sun newspaper labelled Claims Direct Shames Direct. They were also featured on national television programme Watchdog. Although Claims Direct made the expression no win no fee famous what they did not tell their clients what would happen if they won. When Claims Direct was first formed in 1995, it soon grew to be one of the most successful private companies. It was heralded as bringing the no win no fee option to everyone. Until that point you could only pursue your case free if you were eligible for legal aid or you had before the event insurance or belonged to a trade union. The company soon floated on the stock exchange and there was a mad rush to buy shares. Within a few months these shares had virtually doubled as people bought in to the notion of the no win no fee culture. There was massive advertising on television making the phrase no win no fee so famous. However, it is a shame that they did not make it clear what would happen if you won your case. After the Sun’s relentless campaign against Claims Direct the shares nose dived and thousands of people lost their money. With the demise of the company there were others ready to take over their mantel. Surprisingly enough the Sun campaign did not have a lasting effect on the population as The Accidents Group became even more powerful. Their marketing campaign was different from Claims Direct. Not only did they advertise on television with their catch phrase “Where there is blame there is a claim”, this catchphrase became as famous as no win no fee. Also they had a vast amount of people door knocking trying to canvass cases. They also operated stands at supermarkets However, they too operated a system which left many clients with a fraction of their original damages. Watchdog also featured this company. Part of their report was showing all the bogus claims which were being orchestrated by TAG representatives. One of the famous ones was a representative which was caught on CCTV lifting a pavement stone with a lever in order to ensure that the pavement was dangerous enough to be able to bring a claim. Another example was a bus accident where the driver hit a wall and became unconscious. Ticket sales showed that there were 10 people on the bus at the time of the accident, however in the 12 minutes that it took the ambulance and police to arrive at the scene there were now 30 people on the bus. This was a disaster for the whole personal injury market and the whole no win no fee concept. Although this company remained private it did produce vast profits. They were based in Kings Street, Manchester in what was purported to be some of the most expensive rental offices in the country. They had lavish balls in aid of the NSPCC and had guest speakers like Prince Andrew, President Clinton and Cilla Black. However, for them to the no win no fee bubble burst when the banks realising that many of the cases did not have good prospects for success and therefore would not be won which meant that the loans could not be repaid. No win no fee run in this way was a disaster for the banks and the insurance companies and clients !! But things have now changed. Here at Accident Compensation Aid NO WIN NO FEE means just that it also means 100% compensation . |
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