Last Updated on 5th March 2025
Conditional Fee Agreements in professional negligence claims.
A Conditional Fee Agreement, commonly known simply as a CFA , is a type of ‘No Win, No Fee’ legal funding. It is an arrangement between a legal representative and a client where payment of the legal fees are deferred until the end of the case and the obligation to pay those fees depends on whether the case is won or lost.
It is common for professional negligence claims to be funded by way of a CFA.
Solicitor’s Fees
If a CFA is entered into, the solicitor will agree to defer payment of his fees until the end of the case. If the case is lost, the fees are written off, hence the term ‘no win, no fee’. If the case is won, the client is liable for the fees together with an uplift known as a ‘Success Fee’. Some fixed costs can usually be recovered from the losing party, but the client will be liable for any costs not recovered, plus the Success Fee.
What is a Success fee?
A Success Fee represents payment for the risk the lawyer has taken in dealing with a case where there is a chance he will not be paid for the work carried out. It is calculated as a percentage of the solicitor’s costs rather than being a percentage of the damages recovered, which many people assume is the case. The percentage is set at the outset of the case based on the known risks of the case. It takes into account the prospects of success, credibility, quality of evidence etc. The Success Fee can be anything up to a 100% uplift on the costs.
If the client is successful, they will be personally liable for the Success Fee.
Counsel’s Fees
Many barristers also agree to work on a CFA basis which operates in a similar way as a solicitor’s CFA.
Legal Expenses Insurance
The loser generally pays a fixed sum in legal costs to the winner. Claimants can however insure themselves against this risk and legal expenses insurance products are widely available on the market. The premium for the insurance is payable by the client. Policies differ but most are self-insured and the premium is deferred.
Disbursements
These are expenses associated with the claim that are paid to third parties. For example, expert’s fees, court fees, travel costs etc.
Our cap on what you will pay us if you win
If you win your case then you will become required to pay the costs we have incurred plus the success fee. We will deduct any fixed costs recovered from the losing party from your bill, but the balance is payable by you.
Because it is impossible to identify what all these figure will be at the outset and to allay worries that someone will be left out of pocket even if they win, we offer to cap the total of costs and success fee. This gives the client the guarantee that they will receive a minimum percentage of their compensation, whatever the final figures are.
For further guidance on Conditional Fee Agreements in professional negligence claims call us on 0333 888 0403 or email us at [email protected]
