A no-win, no-fee claim, also known as a conditional fee arrangement, is a type of claim where you are insured against legal expenses. Even if you sue and lose, the other side has to pay your legal fees. America has seen a gradual shift towards no-win, no-fee laws, which target insurance companies, forcing them to provide this protection for claimants. As with everything, there are benefits to this policy, as well as some unintended consequences. Here is a look at the pros and cons of conditional fee arrangements.

Pro: It’s only right for the victim. This is the argument that carried the day. Congress was full of testimonies from victims who have been involved in a personal injury case which was not their fault. Few of them were able to get appropriate representation in court. Today, a victim can hire the best personal injury attorney around and know they will not pay a dime even if the case is thrown out. We are one of the few countries in the world that provides this level of protection for our citizens.

Con: The conditional fee system has turned America into a more litigious society. The courts are full of absurd claims, such as cases where people sue restaurants over failing to tell them their “hot coffee” will be hot. People abuse the privilege this law affords through self-serving efforts to “just get money.” This creates a lot of extra work for the courts, which in turn reflects a greater tax burden for the rest of us.

Pro: No-win, no-fee has turned us into a more just society. In the past, the size of your bankroll often played the biggest role in the size of your compensation package. If a wealthy person choked on a piece of glass in their steak, their lawyers would win claims in the millions of dollars. Whereas our less-fortunate citizens would routinely suffer with no chance of winning a settlement. Today, you are entitled to an attorney and free legal services (paid for by the other party’s insurance) irrespective of social class. That is definitely an improvement.

Con: The conditional fee system has precipitated a national health care crisis. One of the biggest, so-called “artificial and avoidable” costs of health care are provider insurance policies. Each year, medical expenses increase as providers require more expensive policies. What is the main reason behind the increase? Frivolous medical malpractice lawsuits, filed by self-serving individuals who try to exploit the system. They know they can sue risk-free since hospital insurance has to pay their legal costs.

Pro: Better prospects for individual recovery post-injury. Before no-win, no-fee, you were likely to get a sum just to cover your expenses immediately after the accident. Chronic issues were not taken into consideration because these require multiple, expert testimonies from doctors and sophisticated grasp of the law, such as only a personal injury attorney would have. Overall public health was worse post-injury as people struggled with whiplash and other chronic pains. Now injury claims include treatment, adjusted for inflation, for decades post-injury. Treatment can also be sought from private care physicians, allowing flexibility in practitioners and access to specialists.

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