The conditional fee agreement (or ‘CFA’) is a funding agreement between client and solicitor where the fees are determined on the outcome of the case. When damages are awarded in a case CFAs were introduced after cuts were made to legal aid and are primarily used in personal injury cases.
What are the different types of CFA?
A typical fee agreement is the ‘no win no fee’ arrangements where the solicitor will not be paid anything unless the case is won. The solicitor will then take a percentage of that award.
Variations of the CFA agreement include:
- Discounted CFA – the solicitor will receive a smaller percentage of his fees if the case is lost, but will recover the full fees if the case is won.
- CFA Lite – the solicitor uses a no win no fee or discounted CFA, but any success fee is capped
Advantages and disadvantages of CFAs
The main attraction of a CFA agreement is that the costs are only payable if the case is won. There will however, often be upfront costs as solicitors will often seek the advice of a barrister on the prospects of the case before they agree to act on a CFA. Additionally, as the risk of costs under a CFA is shifted from the client to the solicitor, it is likely that the solicitor will only take if there are very good prospects of success.
When can a CFA be used?
CFAs are available to everyone, regardless of means. It is completely at the discretion of the solicitor when a CFA can be used. Most will have strict guidelines within the firm as to when it is appropriate to use a CFA. They are usually used by the claimant, although the defendant is also able to use a CFA.