Watchdog: No Win, No Fee Promise Is False
So many claimants are facing unexpected or illegitimate bills from "no win, no fee" law firms that the phrase should be scrapped, a watchdog has said.
In a damning report, the Legal Ombudsman said it dealt with around 600 cases last year where "no win, no fee" lawyers wrongly billed clients for "significant and unexpected costs".
As a result, it ordered firms to pay almost £1m in compensation.
It blamed an "increasingly aggressive" market for encouraging firms not to vet cases properly and then to resort to "unethical practice".
Lawyers were "tempted to try and pass the risk to on to a customer or simply go back on the terms of the agreement to get out of a problem they created", the report said.
Others failed to explain complex contracts sufficiently clearly to clients.
One victim was handed a £24,000 costs bill for a successful outcome to his case - despite the law firm having withdrawn and left him to represent himself.
The system was introduced in 1995 as a replacement for taxpayer-funded Legal Aid to enable people to afford to pursue civil claims such as car crash injuries, employment disputes or medical negligence.
Abuses were not yet widespread, the report concluded, but swift action was needed by professional bodies and regulators to ensure it was stamped out before it spread.
Chief Ombudsman Adam Sampson told Sky News: "'No win, no fee' is an apparent promise that lawyers and claims manage. That promise in many cases is just not real - it's a false promise and what happens is that lawyers exploit the loophole in conditional fee arrangements."
He said the report raises genuine questions as to whether the "no win, no fee" label should be used at all.
Warnings have previously been issued by the Advertising Standards Authority about "misleading" commercials which fail to explain that clients can become liable for some costs.
:: Watch Sky News live on television, on Sky channel 501, Virgin Media channel 602, Freeview channel 82 and Freesat channel 202.