What Does "No Win, No Fee" Actually Mean?
No win, no fee means that if your claim is unsuccessful you do not pay a fee. If it succeeds, the claims company takes a pre-agreed percentage of the compensation (up to a maximum of 36% including VAT, in line with FCA rules). Importantly, you do not need a claims company at all — you can complain to your lender directly for free.
This model removes the upfront financial barrier to claiming, but it is not "free money": a share of any compensation goes in fees, and compensation is never guaranteed.
The 2025 Supreme Court ruling and the FCA redress scheme
The fee question now sits inside a specific framework. On 1 August 2025 the Supreme Court ([2025] UKSC 33) largely sided with lenders — it held that dealers were generally not fiduciaries and dismissed the broad "secret commission" claims — but upheld one narrower claim under the Consumer Credit Act's "unfair relationship" test. As a result, compensation now flows mainly through the FCA's industry-wide redress scheme, confirmed in Policy Statement PS26/3 (30 March 2026), rather than through automatic court payouts.
The scheme is free to use and covers qualifying PCP and HP agreements taken out 6 April 2007 to 1 November 2024. The FCA estimates an average of around £830 per eligible agreement (it varies widely, and some people receive nothing). The scheme is currently subject to a legal challenge that the FCA has said will delay payouts, so timescales are uncertain (FCA, 2026).
Because the scheme is free and, in many cases, lenders must proactively contact eligible customers, it is worth understanding the genuine trade-off before paying anyone a fee.
How much do claims companies charge?
Claims management company fees are capped by the FCA and banded by the amount of redress you recover. The maximum is up to 36% including VAT (equivalently 15%–30% plus VAT). The more you recover, the lower the percentage:
| Redress recovered | Max fee (excl. VAT) | Indicative max fee (inc. VAT) |
|---|---|---|
| £1 – £1,499 | 30% | up to 36% |
| £1,500 – £9,999 | 28% | up to ~34% |
| £10,000 – £24,999 | 25% | up to 30% |
| £25,000 – £49,999 | 20% | up to 24% |
| £50,000+ | 15% | up to 18% |
For example, on £2,000 of compensation a 30% + VAT fee (36% inc VAT) would be £720, leaving you £1,280. There are no upfront costs and no charge if the claim does not succeed.
Note: the old "50% cap" figure related to PPI claims and does not apply to motor finance claims. Always check the exact fee in your written agreement before signing.
Claiming yourself vs using a claims company
You can pursue the free route yourself or pay a company to manage it. Here is the honest comparison:
| Factor | Claim yourself (free) | Use a claims company |
|---|---|---|
| Cost | Free — you keep 100% | Up to 36% inc VAT of any compensation |
| Effort | You handle forms, lender contact, FOS escalation | Handled for you |
| Control | Full control | Company acts on your behalf |
| FCA redress scheme | You can take part directly, for free | Company submits/manages it for you |
| If rejected | You refer to the Financial Ombudsman yourself (free) | Company manages the FOS referral |
| Risk | No fee, but more of your time | No win, no fee — but a fee if you win |
For many people the free, direct route is entirely sufficient — especially under the redress scheme, where lenders are expected to contact eligible customers. A claims company mainly saves you time and admin.
What about interest on compensation?
Under the FCA redress scheme, interest is generally set at the Bank of England base rate plus 1% per year (with a minimum of 3% per year), rather than a flat 8%. If you complain outside the scheme or escalate to the Financial Ombudsman, different interest rules may apply. The exact remedy depends on your agreement (FCA, 2026).
Are there any hidden costs?
A compliant no win, no fee agreement should have:
- No upfront fees of any kind
- No admin or processing charges
- A 14-day cooling-off period during which you can cancel without charge
- No fee at all if the claim is unsuccessful
A reasonable charge may apply only if you cancel after the cooling-off period but before a decision, to cover work already done — this must be set out clearly in your agreement.
Frequently Asked Questions
Do I have to use a claims company? No. You can complain to your lender directly for free and, if needed, refer the matter to the Financial Ombudsman Service yourself at no cost. A claims company is optional.
Is compensation guaranteed? No. Eligibility and any payout are decided case by case. The £830 figure is an FCA average per eligible agreement — amounts vary widely and some people receive nothing.
When will I be paid? Under the scheme, accepted offers are normally paid within one month — but the timetable is currently disrupted by a legal challenge, so dates are uncertain.
What if the lender has already rejected my complaint? A lender rejection is not the end of the road — you can refer it to the Financial Ombudsman yourself for free, or contact us to discuss your options.
Get Started
If you had PCP or HP car finance through a dealer between 6 April 2007 and 1 November 2024, you may be eligible — but you can also claim free yourself.
Start your free eligibility check now — no cost and no obligation. You can also learn more about how our process works, what we offer, or get in touch. This article is general information, not legal or financial advice.
