"No-win, no-fee" (Conditional Fee Agreements)

 

What is a no-win, no-fee agreement?

Conditional Fee Agreements (CFAs) are also known as "no-win, no-fee" agreements and can be used when a client has a good case but does not have the funds available to pay for the solicitor's legal fees.

How CFAs work

The way they work is that the solicitor will agree to defer the payment of his fee until the outcome of the case (either at trial of if the case settles before this). In litigation, the losing party usually has to reimburse the winning party's legal costs. Therefore the solicitor, provided he wins the case, will have his costs paid by the other side. As the solicitor takes a risk by agreeing to defer payment until the end of the matter, solicitors are allowed to charge an additional 'success fee' (which is a fixed percentage of their fees) which the other side will have to pay. Where the case is a particularly risky one, the success fee can be up to 100% of the solicitor's standard hourly rate.

What you need to consider

What you need to bear in mind is that there is always a possibility that you could lose your "no-win, no-fee case". In this case whilst you would not be expected to pay your own solicitor's fees, the other side (who has won) will expect you to reimburse them for their legal expenses.

It is for this reason that if you are contemplating asking a solicitor to take your case on a "no win no fee basis" you will generally be advised to take out what is called "after the event" insurance. This will protect you in the instance that, for some reason, your case is not successful.

Will a CFA be available for my case?

CFAs can be used to fund any type of legal action for resolving disputes (whether already ongoing or merely contemplated), apart from criminal or family proceedings. However, not all cases lend themselves to a CFA. A risk assessment is undertaken by the solicitor on a case by case basis. In certain cases, it may be possible to engage a barrister under a CFA also. He will undertake his own separate risk analysis as well.

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