Conditional Fee Agreements (CFAs) can be a cost-effective way of instructing legal representation, especially if you’re on a tighter budget. However, it’s not always possible to use a CFA and you may find that your solicitor is not willing to enter into one. In this article, we give a brief introduction to CFAs, when most solicitors choose to take them on and why.
What is a conditional fee agreement?
A conditional fee agreement is an agreement with your legal representation that their fees (and possibly their expenses) will only be paid if certain requirements are met (such as winning the case). You may have seen this kind of arrangement referred to as ‘no-win, no fee’.
When are conditional fee agreements used?
It is not possible to use conditional fee agreements in all areas of law, although in the majority of cases it is technically possible. Whether or not you are able to secure a CFA will come down to your solicitor or barrister.
Benefits of CFAs
If you don’t win the case, you don’t have to pay your lawyer but there may be some disbursements that you may have to pay for, which your lawyer will discuss with you and which will be reflected in your CFA. There is no need to front cash in order to instruct your lawyer.
If you do win, your legal fees should be covered by your compensation
Shared risk with your solicitor
What is a success fee in a CFA?
Along with the agreed legal fees, your solicitor may include a ‘success fee’ in the conditional fee agreement. This is a fixed cut that your solicitor will take from your damages or compensation. Note that the success fee cannot be recovered from the losing party, you will be responsible for this.
What kinds of cases can you use CFAs for?
Most solicitors will agree to work on a CFA basis for cases such as:
Disrepair claims where repairs have been carried out and you are seeking compensation that is more than £10,000.
Repairs and compensation that are valued at more than £1000.00.
Breach of contract where you are seeking more than £10,000.00.
However, you may be hard pressed to find a solicitor that will agree a CFA for cases where:
The disrepair has been fixed and their compensation will not be valued at over £10,000.
Repairs and compensation are valued at less than £1000.00.
Contract claim is for valued at less than £10,000.00.
This is because these cases are generally classed as small claims.
Where will my claim be heard?
The general rule is that the cases above are dealt with by different routes:
Small claims
Repairs and compensation are valued at less than £1000.00.
The disrepair has been fixed and the solicitor’s compensation is not going to be over £10,000.
Contract claim is for less than £10,000.00.
Fast Track
Disrepair claims where repairs and compensation are valued at more than £1000.00
Contract claim is for more than £10,000.00.
Multi-track
Very complicated cases with a value of more than £25,000.00.
The key difference, and the reason many solicitors don’t offer CFAs on small claims, is the ability to claim your solicitor’s costs.
Generally, if you win, in a small claims court, you are only able to claim your compensation. You will not be able to claim solicitors’ costs, there are exceptions to this, but it is very rare.
This means that your solicitor will not be paid, so you will either have to pay privately for their services and guidance on your matter, or, you will have to do it yourself.
By contrast in fast-track cases, you are able to claim for your solicitor’s fees.
How are cases allocated to the small claims or fast track?
When deciding on what route the claim should be heard, the court must consider certain points, which include the value of the claim and the complex nature of the matter.
The court may decide that your case is not that complex and so allocate it to the small claims even if the value is over £10,000.00. Or they might believe that even though the value is below £10,000.00, that it is so complicated that it must be heard in the fast track.
Repairs and compensation valued less than £1000.00.
If the value of your repairs and compensation are less than £1000.00, then it is likely that your claim will be allocated to the small claims court.
The disrepair has been fixed and my compensation is not valued at over £10,000.
If your repairs have been carried out and you are only claiming money, for example for belongings that have been destroyed or for distress and inconvenience, and the value is not going to be over £10,000.00, your case is likely to be allocated to the small claims court.
Breach of contract claim is for valued at less than £10,000.00.
If the value of your claim for a breach of contract is for less than £10,000.00, your claim is likely to be allocated to the small claims court.
What happens if your case is not suitable for CFA
If your solicitor does not believe that your case is suitable for a CFA or will fall within the small claims, they can offer to carry out work on a:
Fixed fee
Privately hourly rate
If you’re in need of legal expert advice or representation, get in touch with us to speak about your case with one of our expert lawyers and see if you are eligible for a CFA.
* Disclaimer: The information is for general information only. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied. *