After retired teacher Peter Hodgson thought he had been wrongfully arrested by Greater Manchester Police, he believed he had nothing to lose by suing them.

The 80-year-old filed a claim for damages that would pay him £5,000 if he won – and because he employed a law firm to represent him on a ‘no win, no fee’ basis, Peter assumed that even if he lost, he would not be out of pocket.

So he was shocked and distraught when he lost and was presented with a bill for £52,000.

What Peter didn’t realise is that the no win, no fee agreement – also known as a Conditional Fee Agreement (CFA) – would cover the costs of his own law firm if he lost, but not those of the other side.

Since they were introduced in 1995, CFAs have been a lifeline to hundreds of thousands of people who have a case, but can’t afford legal support to represent them.

Many firms offering CFAs are responsible and upfront about what clients will and won’t be liable for. But the sector has long been mired in controversy and Peter is not the only one to face paying the price.

Earlier this year, the Solicitors Regulation Authority (SRA) criticised legal firms offering CFAs for ‘not fulfilling their obligations to always act in their clients’ best interests’. It says that it had 83 open investigations into 72 firms at the end of 2025.

Law firms were told that regulations were to be tightened, so there would be increased emphasis on transparency, informed consent and consumer protection. 

Later this year, the Legal Services Board, which oversees the legal industry in England and Wales, will publish a review of CFAs that could force the Government to legislate.

Nikki Stopford, co-founder of consumer rights organisation Consumer Voice, says: ‘No win, no fee can be a lifeline for people who want to take on big companies but simply couldn’t afford to do it alone.

But there are clear issues with some unscrupulous firms in the sector.

‘The legal regulator has put the industry on notice, but we’re sceptical this will be enough. Issuing guidelines or even banning the phrase “no win, no fee” won’t stop the rogue operators.

‘Consumers need the regulator to step in and use its powers quickly to ensure that they are not harmed by bad practice.’

For Peter, his no win, no fee nightmare started in December 2015, when he and his son Simon were accused of verbal abuse, assault and threats to kill by neighbours after a long-running land dispute in

Saddleworth. Peter was charged by the police and held in a cell for more than seven hours – despite having angina and related health conditions.

In October 2016, Peter was acquitted of a public order charge at Tameside Magistrates’ Court, thanks to CCTV footage of the incident. 

Having been cleared, Peter thought he may have a case against the police for holding him. So he instructed HNK Solicitors, which advertised itself as experts in suing the police, under a no-win, no-fee agreement.

In 2019, he filed a £5,000 county court damages claim against Greater Manchester Police (GMP) for false imprisonment.

Following the pandemic, in August 2023, his claim finally went to trial at Manchester County Court. However, the jury found that the force had acted within its rights and Peter was told he had to pay its legal costs.

Peter thought the costs would be covered if he lost. So he was horrified to receive a final demand for £52,000 from the force’s solicitors Clyde & Co. And with interest and additional costs, the total bill began to edge closer to £60,000.

His son Simon says: ‘Finding my dad sitting at the computer, staring at a letter demanding £52,000, was one of the darkest days of our lives. He lost so much sleep. The amount of worrying he did was unbelievable. 

He said, “That’ll bankrupt me. I’ll lose everything. I don’t know what to do.” He was broken. He was devastated.’ Simon said his father had been assured by HNK that he had a strong case, but once he was defeated, he was on his own.

‘His solicitors abandoned him,’ he says, ‘and my dad was left to take on negotiations over the costs himself. But every time he wrote to Clyde & Co, they were adding on to the bill. They were charging him interest on everything, plus charging him for all the letters and the time they were spending on it.’

Most people in this situation would have little choice but to pay up. Fortunately for Peter, another law firm found a loophole that meant he did not have to. 

A friend in the legal industry suggested to Simon that his father consult a costs lawyer, Victoria Morrison-Hughes, from Integral Legal Costs, who is also vice chair of the Association of Costs Lawyers.

Costs lawyers focus on calculating, challenging and advising on who pays legal fees and how much. 

Ms Morrison-Hughes discovered that Clyde & Co and GMP had missed the mandatory three-month deadline to serve their bill of costs.

They then failed to comply with two separate court orders which required them to commence a detailed assessment.

Ms Morrison-Hughes, who is based in Cheshire, says: ‘The reason why we got the victory was completely due to their conduct – because they have to do things within a certain time frame and they didn’t do them.’

She said that any losing claimant is faced with a difficult decision if they think the bill is unreasonable as challenging it can just pile on further costs.

Ms Morrison-Hughes charged Peter fixed fees for her services.

However, she acknowledges that a CFA can be the right option for some cases – so long as they are handled transparently.

But if you need legal support, you may find that you can get it for free through your home insurance policy without needing to resort to a CFA at all. 

Some home insurers offer Before The Event insurance, which covers legal disputes. Some banks even offer it to holders of their premium current accounts. Alternatively, you can buy After The Event insurance, which indemnifies you in the event of losing a case.

Peter Hodgson died in 2024 knowing that the legal bill had been wiped and the family home would not have to be sold to

pay it. Thanks to Ms Morrison-Hughes, his widow Kathleen, 88, and son Simon still have a roof over their heads.

A tearful Simon warns: ‘Don’t trust a legal firm offering an easy solution. I am sure there are some great legal people out there, but you need to fully understand what you are getting yourself into and the consequences if you lose. 

'If my father had known the risks from the start, he never would have gone ahead.’

Express Solicitors, which acquired HNK Solicitors in 2025, said client confidentiality prevented it from commenting on the case in detail. 

It said that all clients are told of the ‘costs’ ramifications’ should they lose and that it is ‘entirely normal’ for solicitors to cease representing them once a case has closed.

A Clyde & Co spokeswoman said Mr Hodgson’s claim had been dismissed in favour of GMP and that all steps taken in the case, including cost recovery, were appropriate and in accordance with the court rules. 

She added: ‘Any suggestion that enforcement action was intended to cause personal hardship or that inappropriate threats were made would be misconceived.’

A spokeswoman for GMP said the court had found that Mr Hodgson’s arrest was lawful.