What is a conditional fee agreement ("CFA")?
Conditional Fee Agreements (“CFAs”) are often referred to as ‘no win, no fee’ agreements. This description is somewhat misleading as this type of arrangement usually only covers your liability for your own solicitor’s fees and not the other expenses or disbursements which are likely to be incurred such as court fees, barrister and expert fees. Some barristers will act pursuant to CFAs but they, as with solicitors, are not obliged to offer such terms.
One of the benefits of a CFA is that it transfers some of the risk of pursuing litigation to your solicitor. Under this type of agreement you agree to pay the solicitor a success fee in addition to their normal fees - if the case is successful. In exchange, the solicitor agrees that they will not seek recovery of some or all of their fees if a case is unsuccessful. The success fee is calculated as a percentage of the normal fee and cannot be more than 100%.
There is usually a trade-off if you want to minimise the amount you pay your lawyer if you lose. If you win, you will pay them considerably more, in other words the additional amount you pay on winning is payment for offsetting some of the financial risk were you to lose.
The standard costs position is that the unsuccessful party pays the successful party’s costs (which will include barrister’s fees; expert’s fees; and other disbursements). Therefore it is important to note that, if you are unsuccessful, in addition to your own expenses and disbursements (plus any sums due to your solicitor under the conditional fee agreement), you will also have to pay your opponent’s costs unless the Court orders otherwise e.g. that they are payable from the estate to which the ligation relates.
Subject to a full review and analysis of your case, which would usually be undertaken on a private fee-paying basis, and the prospects of success meeting our requirements, we can offer CFAs for a variety of will disputes and claims against estates, for example those for reasonable financial provision pursuant to the Inheritance (Provision for Family and Dependents) Act 1975.
What does 'no win no fee' actually mean?
Historically, solicitors could offer clients a ‘no win no fee’ agreement in respect of their legal fees, meaning that if the case was lost, the client would pay nothing, but if the case was won, the losing party would pay the solicitor’s usual costs plus the success fee.
What is a 'success fee'?
The success fee was often 100% of the solicitor’s usual fees. This worked for the client, because the majority of the fees, including the success fee, were paid by the losing party provided they had received a prior warning that the solicitor was acting under a conditional fee agreement which included a success fee.
On 1 April 2013, the Legal Aid, Sentencing and Punishment of Offenders Act 2012 removed the ability to recover a solicitor’s success fee and After the-Event Insurance Premiums from the losing party.
This means that clients now have to meet the cost of any success fee or insurance premium themselves, and so it is vital that a cost/benefit analysis is carried out to make sure that any funding arrangement put in place is financially worthwhile for you.
What are some alternative funding options?
When deciding which firm of solicitors you wish to instruct, you should make enquiries about the different types of funding options which might be available.
It is unlikely that you will find a firm which will guarantee that it can offer a particular type of funding arrangement but at Wright Hassall, we pride ourselves on considering all the appropriate funding options and advising you about which is best suited to your needs, by reference to your case.
While CFAs might on the face of it seem like a good option, they can be expensive once the success fee element has been taken into consideration. An alternative in many cases, is a deferred fee payment arrangement whereby some or all of your costs are paid at the end of your case but the costs are payable irrespective of whether you are successful with your claim. Some barristers who specialise in will disputes also offer similar funding arrangements and we can advise on the cost of funding your claim so that you can make an informed decision at the outset.
Will disputes, executor disputes and proprietary estoppel claims all lend themselves to deferred payment arrangements as money from the deceased's estate becomes available once probate is granted, unlocking the funds to pay costs.
We would be happy to have an initial discussion with you to see if we may be able to represent you on this basis. To find out more, please submit the Contact Us form at the bottom of our main webpage, setting out brief details, and we will be in touch.
The information provided in this article is provided for general information purposes only, and does not provide definitive advice. It does not amount to legal or other professional advice and so you should not rely on any information contained here as if it were such advice.
Wright Hassall does not accept any responsibility for any loss which may arise from reliance on any information published here. Definitive advice can only be given with full knowledge of all relevant facts. If you need such advice please contact a member of our professional staff.
The information published across our Knowledge Base is correct at the time of going to press.
