Conditional Fee Agreements

Conditional Fee Agreements (CFA) are typically known as a “no win no fee” agreement. If we agree to work for you under the terms of a CFA, we agree not to make any charge if the case is lost.

The object of the CFA is that we share the risk of litigation with you. You will however be responsible for disbursements (win or lose), such as court and barrister's fees although sometimes barristers will also take a case on a conditional fee basis.

If we are acting for you under a CFA, in the event that you win, we will charge you for our fees on a regular "time spent" basis, according to the amount of work we have done on your matter. In addition we will charge you a “success” fee. This is an uplift of our normal fees. This uplift, or success fee, cannot be more than 100% of the regular fees you have been charged. The success fee uplift is typically in the range 50%-75% of the total amount of your regular fees, depending on the level of risk associated with your particular case. 

We will not be able to set the level of the success fee until we have been able to carry out a risk assessment on your matter. This usually means that we need to assess the strength of your claim, and the merits of any defence, before we can start acting for you under the terms of a CFA. Sometimes it will be very obvious that you have a strong claim, and that there can be no defence to it. In those cases we can start working for you under the terms of a CFA straight away. However, in most cases, an assessment of the merits will be required before we can decide whether a CFA is an appropriate arrangement for your case. Accordingly, there will normally be an element of work involved before we can agree to a CFA, and you will be asked to pay for that work.

You cannot recover the success fee element of the costs you incur from your opponent. You will remain responsible for paying the success fee yourself. Other than that, the majority of your regular legal costs are generally recoverable from the losing party in the event that you win your case. Typically, we recover in excess of 70% of costs and disbursements (excluding of course the success fee).

If you are considering entering into a CFA with a solicitor, it is important that you consider the following factors very carefully:

• If you lose, you may be required to pay the costs of the other party, but it may be possible to insure against the risk of paying the other side’s legal costs.

• You must check carefully that you do not have any insurance policies which may cover your legal costs. You should check household policies (building and contents), motor policies and any insurance policies which may have been taken out with credit cards and any commercial policies. We can review the schedule to all such policies for you if necessary.

• You may have alternative methods of funding, such as trade union membership, trade associations, motor organisations etc. If you are a member of any organisation which may provide legal expense cover, you should check such organisations for legal expense cover.

• You will remain responsible for paying the success fee, as well as the shortfall on any fees which are recovered from your opponent. For most people, the success and fee shortfall are paid from any damages which they recover. 

This article is a summary to explain how a CFA typically works. In the event that you wish to consider instructing a lawyer on the basis of a CFA agreement, you will need to consider the terms of your specific agreement very carefully.

To help clarify the issue of costs, disbursements and what is recoverable, the following is a hypothetical example as to how this might work in practice, although the amounts involved will vary from case to case.

Example of a CFA "No Win No Fee" Case

A client sues an opponent for breach of contact. The claim is for £50,000. The client is offered a CFA agreement with a 50% uplift. The case settles at mediation for £40,000.

The final result might be that the solicitor's regular costs are £8,000. These costs become payable by the client under the terms of the CFA, as they have been successful. 

The opponent is ordered to or agrees to pay 75% of the client's costs. This equates to £6,000. The remaining £2,000 shortfall is the client's responsibility. 

The client is also responsible for the 50% success fee. This is £4,000 (being 50% of the regular fees of £8,000). 

The total the client pays is therefore £6,000 (the £2,000 shortfall and the £4,000 success fee). If this is paid from the £40,000 damages they recovered, they would end up with £34,000 in their pocket. 

Bear in mind that VAT at the rate of 20%, and disbursements, are added to all solicitors' fees. 

If you have a strong case, and need the support of solicitors under a CFA, we may be able to help.