What are Conditional Fee Agreements?

A Conditional Fee Agreement (CFA) is an alternative source of litigation funding in which you only have to pay fees to your solicitor if your case is successful.

These arrangements are commonly referred to as ‘no win, no fee’ because you do not have to pay your solicitor anything if your claim is unsuccessful.

If your case is won, the success fee payable to your lawyer cannot be recovered from the other side and will therefore be deducted from the damages you are awarded.

This deduction will be capped as a percentage of the compensation you receive, so even if your pay-out is too low to cover your legal costs you still retain most of your damages.

If you win, you may be able to recover disbursements (expenses) from your opponent. Conversely, if your case is lost, you may be liable for some expenses.

Pros

  • No Win, No Fee: you don’t have to pay your solicitor’s fees if you lose
  • No Money Tied Up: if you win, your legal fees are deducted from the damages you receive so you don’t have to draw on any existing funds to pay your solicitor
  • Capped Deductions: if your pay-out is too small to cover your legal fees, you still get to keep most of your compensation because the fee you pay will be capped

Cons

  • Feasibility: not all cases will qualify for CFAs – in order to work on a conditional fee basis, your solicitor has assess that your claim has a high chance of success
  • Expenses: you may still have to pay expenses if you lose – After the Event Insurance (ATE) can help to eliminate this risk
  • Success Fee Not Recoverable: if you win, the fee you pay your solicitor is deducted from your compensation not recovered from the other side

As specialist litigation solicitors, we can connect you with various alternative funding sources if you instruct us to take your claim forwards. For a FREE consultation, just call 020 7963 8690 or email law@cgnaylor.co.uk.

 

Written by James Naylor

Partner, CG Naylor LLP.