Conditional Fee Agreement
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A Conditional Fee Agreement (CFA), also known as a "No Win, No Fee" agreement, is a type of funding arrangement commonly used in civil litigation, including personal injury cases. It allows individuals to pursue a legal claim without having to pay their solicitor's fees upfront. Instead, the solicitor's fees are contingent upon the success of the case.
No upfront fees: The solicitor agrees not to charge any fees or costs at the beginning of the case. This helps individuals who may not have the financial means to pay for legal representation upfront.
Success fee: If the case is successful and the individual receives compensation, the solicitor is entitled to a success fee. The success fee is an additional amount, often a percentage of the solicitor's standard fees, which is payable by the client. The success fee is intended to compensate the solicitor for the risk they undertake by agreeing to work on a no-win, no-fee basis.
No fee if unsuccessful: If the case is unsuccessful, meaning no compensation is awarded, the individual is not required to pay the solicitor's fees. However, the individual may still be responsible for other costs incurred during the litigation process, such as court fees or expert reports, unless they have obtained insurance to cover these costs.
After-the-event (ATE) insurance: In some cases, individuals entering into a Conditional Fee Agreement may also be required to obtain After-the-Event insurance. This insurance policy protects the individual from having to pay the opponent's legal costs in case the claim is unsuccessful. The premium for the ATE insurance is typically payable by the client, but it can be deferred until the conclusion of the case.
Conditional Fee Agreements allow individuals to pursue legal action without the financial risk of upfront legal fees. It provides access to justice for those who may not have the means to pay for legal representation. However, it is important to carefully review and understand the terms of the agreement, including the success fee percentage and potential liability for other costs, before entering into a Conditional Fee Agreement with a solicitor.
No upfront fees: The solicitor agrees not to charge any fees or costs at the beginning of the case. This helps individuals who may not have the financial means to pay for legal representation upfront.
Success fee: If the case is successful and the individual receives compensation, the solicitor is entitled to a success fee. The success fee is an additional amount, often a percentage of the solicitor's standard fees, which is payable by the client. The success fee is intended to compensate the solicitor for the risk they undertake by agreeing to work on a no-win, no-fee basis.
No fee if unsuccessful: If the case is unsuccessful, meaning no compensation is awarded, the individual is not required to pay the solicitor's fees. However, the individual may still be responsible for other costs incurred during the litigation process, such as court fees or expert reports, unless they have obtained insurance to cover these costs.
After-the-event (ATE) insurance: In some cases, individuals entering into a Conditional Fee Agreement may also be required to obtain After-the-Event insurance. This insurance policy protects the individual from having to pay the opponent's legal costs in case the claim is unsuccessful. The premium for the ATE insurance is typically payable by the client, but it can be deferred until the conclusion of the case.
Conditional Fee Agreements allow individuals to pursue legal action without the financial risk of upfront legal fees. It provides access to justice for those who may not have the means to pay for legal representation. However, it is important to carefully review and understand the terms of the agreement, including the success fee percentage and potential liability for other costs, before entering into a Conditional Fee Agreement with a solicitor.
