‘No Win, No Fee’: Conditional Fee Arrangements

24 June, 2016
by: Cripps Pemberton Greenish

Professional Negligence

 

Legal disputes can be expensive. Many people with a good professional negligence claim may not be able to pay for the cost of instructing lawyers until they have successfully recovered money from a negligent professional.

Under Conditional Fee Arrangements (‘CFAs’), solicitors and barristers may agree to charge lower fees – or in some cases no fees at all – if the case is lost, in return for higher fees than they would normally charge if the case is won. This is why CFAs are sometimes referred to as ‘no win, no fee’ agreements. A CFA may not be appropriate in every case, but it may be worth discussing at the outset of a claim.

Solicitors and barristers charge higher fees for a successful claim via a ‘success fee’. This is usually calculated as a percentage of their normal fees, which is to be paid in addition. This percentage increase is designed to offset the risk of losing (and not being paid at all) as well as the cost of not being paid anything until the end of the case. However, due to changes to the rules governing CFAs, success fees can no longer be recovered from the Defendant.

CFAs are different from ‘Damages based agreements’ (DBAs) which are expressed as a percentage of the money/damages awarded at a trial or agreed in a settlement. Examples of DBAs are rare.

 

For more information, see Cripps Pemberton Greenish’s brief guide to professional negligence claims or contact one of our team.