Contents
TL;DR
Scotland uses statutory caps on success fees for certain no win-no-fee agreements. Caps are banded and inclusive of VAT, limiting how much can be deducted from your compensation. Below are illustrative worked examples; your chosen FCA-authorised firm will confirm exact terms in writing.
What does "no win-no-fee" mean in Scotland?
If your case loses, you don't pay the solicitor's success fee. If your case wins, a capped success fee is deducted from your compensation. Outlays/insurance are separate - your regulated firm will explain.
Key concepts:
- Success fee: a percentage of damages, subject to statutory caps.
- Outlays: third-party costs (medical reports, court fees, experts).
- ATE insurance: may cover some risks; terms vary.
Are success fees capped by law in Scotland?
Yes. Scottish law caps success fees at 20% of the first £100,000, 10% of £100,001-£500,000, and 2.5% above £500,000 - inclusive of VAT.
What this means:
- Caps limit deductions from your damages.
- The client care letter from the regulated firm sets out your exact terms.
- Ask for "what I keep" figures at a few potential settlement levels.
Worked examples (illustrative only - ask the firm for exact figures)
These examples are not quotes and not financial advice. They help you understand how caps work. Your regulated firm will confirm the numbers for your case.
Example A - £8,000 settlement
- Cap band: 20% of the first £100,000
- Max success fee: £1,600 (incl. VAT)
- Indicative "you keep" (before outlays/insurance): ~£6,400
Example B - £20,000 settlement
- Cap band: 20% of the first £100,000
- Max success fee: £4,000 (incl. VAT)
- Indicative "you keep" (before outlays/insurance): ~£16,000
Example C - £75,000 settlement
- Cap band: 20% of the first £100,000
- Max success fee: £15,000 (incl. VAT)
- Indicative "you keep" (before outlays/insurance): ~£60,000
Tip: Ask the firm to show your net position ("what I keep") at 3–4 settlement points before you sign.
Do the caps include VAT?
Yes. The statutory success-fee caps include VAT. That's why the percentages are often described as "inclusive of VAT."
What costs are not covered by the success fee?
Outlays (e.g., medical reports, court fees, expert evidence) and ATE insurance (if used) are separate from the success fee. Your regulated firm will explain if they are recoverable or insured.
Practical notes:
- Many outlays are recoverable from the at-fault side in successful claims, but not always.
- ATE insurance terms vary - ask for a plain-English summary.
Is no win-no-fee guaranteed?
No. Funding depends on case merits and the firm's policies. The FCA-authorised firm will confirm if no win-no-fee is available and on what terms.
Can I change firms later?
Possibly. There can be cost implications if you switch (e.g., work done to date). Always ask the regulated firm for written advice before changing.
Comparing capped success fees vs typical flat-rate approaches
Scotland's capped model can protect clients from higher percentage deductions at common settlement levels. Always compare your "what I keep" across options before you agree.
Why comparison matters:
- Some providers advertise flat 25%+VAT elsewhere; Scotland's caps can be more favourable.
- Exact terms vary - get them in writing and compare the net to you.
Plain-English funding checklist (before you agree)
- Ask for clear examples at £5k, £15k, £50k settlements.
- Confirm if outlays/ATE are recoverable/insured.
- Check VAT and whether caps are inclusive (they usually are).
- Request a copy of the client care letter and read it slowly.
- Keep a copy of all documents you sign.