Lifting the Hood on No Win No Fee

Lifting the Hood on No Win No Fee

There is no doubt that the slogan “No win no fee” has had a powerful effect on employment law advocacy. It is often the first thing individuals think of when they consider seeking advocacy in respect of an employment problem.

Lawyers call these kinds of arrangements contingency fees. The positive is that, in some circumstances, such arrangements can offer access to justice for those that wouldn’t otherwise have the financial means.

However, my view of these arrangements is that the old adage applies; if it sounds too good to be true, it probably is.

Let’s look at why this arrangement can be offered. It is a convention in the employment relations industry that an employer, with significant risk of a grievance decision going against them, will contribute to the costs of an employee in any settlement. Employees with good legal cases in ordinary circumstances can expect the employer to at least contribute significantly to their legal costs.

The “No win no fee” employment advocate, at the first meeting, will appraise the strength of the case. The risk is that they will decline to take on any matter where the case is not strong enough. The risk may even be that they take on only sure-fire cases.

rolled up money with money in background on a table

“However, my view of these arrangements is that the old adage applies; if it sounds too good to be true, it probably is.”

So let’s look at what could happen in such an arrangement. If your case is good then you would most probably have had your fees met by the employer anyway. However, you have chosen the advocate on the basis of the fee arrangement. They may not be the best employment advocate for you, or the best value.

Worse than this is the risk that, where a problem with the case arises during the process that affects the strength of the case, the employment advocate may decrease their time and effort investment, given the incentive of payment is jeopardised. This would be a tragic outcome for a wronged employee with a difficult but winnable case to advance.

Probably worse again is the risk that in 50/50 matters, rather than continue to fight for the client, the employment advocate would minimise their own risk of not getting paid by encouraging acceptance of a settlement below the value of a settlement appropriate on the facts of a matter. “No win no fee” arrangements increase the risk that you will be encouraged to settle for less than your case is worth.

What is the alternative then? My practice is to provide a 20 minute free initial consultation to prospective clients. In that time I appraise them of the strength of their case and the likelihood their fees will be covered by the employer. That way my client’s know from the beginning the risks and can be guaranteed of strong advocacy in all circumstances.

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