Commonly known as ‘no win no fee’, the correct terminology is a contingency or conditional fee agreement. The equivalent in Spanish is known as ‘Cuota Litis’. When agreeing to this this type of contract, the client should clearly understand the type of agreement that he is entering into before signing the engagement letter.
It was not until 2008 when a court case set a precedent for lawyers in Spain to be able to offer their clients their services on a ‘no win no fee’ basis. Before this date it was absolutely prohibited by the Colegio de Abogados for lawyers to enter into this form of agreement and is now being recognised by lawyers who will usually offer this fee condition only when they are confident of the outcome. (Please note that the lawyer will be paying court costs and barristers fees and consider his and the time of his staff.) There are some facts that a client should take into consideration when entering into this type of legal agreement. Many clients are confused when reading the contract and note that if they lose the case or if the other side is not sentenced to pay court cost and or other fees, that the client could be liable.
This contingency fee agreement means that you enter into an agreement with the lawyer who takes on your case on the condition that; if you lose you should pay the costs. The lawyer takes the risk that he will not be paid and will almost always have covered the court costs and the attorney fees. To date I am not aware if there is an insurance in Spain that a client could take out to cover this eventuality as there is in the UK.
Fees will normally be gaged on a percentage of what you recover. Remember that you are also paying for the lawyers success and the fact that he/she will be using their money to pay any costs in advance. There could also be a team of of lawyers involved and their time is also money. Spanish lawyers do not enter into to this type of pact lightly.
If you are entering into a conditional fee arrangement and you need advise or clarification you can contact Citizens Advice Bureau Spain.