In most civil court cases the rule is that the loser pays the winner’s costs. There can be lots of extra complications, and some specific costs may not be recoverable, but lets ignore those to keep it simple.

If you are the defendant and you lose you usually have to pay some kind of compensation to the claimant as well.

When solicitors operate on a contingency fee basis (commonly called no win no fee) they are entitled to charge an extra percentage on the fees if they win. This helps them to offset the fees they don’t get if they lose. The percentage depends on the type and complexity of the case and is agreed by the court.

As a client “no win no fee” does not mean you have nothing to pay. To start with you are still liable for disbursements such as court fees and experts fees. If you lose you will still have to pay the costs of the other side. Generally these fees are covered by taking out an insurance policy to cover you in case you lose. So the disadvantage of “no win no fee” is that it still costs you something, and if you lose it probably costs you (or your insurer) more than it would have done because you now have to pay for the extra winning percentage of the other sides fees, plus their insurance premium etc.