There are two types of “no win no fee” agreements, namely Conditional Fee Agreements (“CFAs”) and Damages Based Agreements (“DBAs”).
Currently at Maples we are only able to offer CFAs in personal injury claims.
What is a CFA?
This is an agreement between the solicitor and the client which in effect means that only if the claim is successful will the client be responsible for his solicitor’s costs. If the claim is lost then save for expenses such as medical report fees, the client will not have to pay his own solicitor any money.
If the case is won then the client is liable to the solicitor for his costs (although usually the successful party will get an Order for at least some if not most of his costs to be paid by the losing party), and the solicitor is entitled to charge a success fee in addition to his normal fees. The success fee in effect is the solicitor’s reward for taking the risk of losing and not getting paid. It is usually stated as a percentage mark-up or enhancement of the normal fees.
As stated above even if the case is lost, the client will still be liable for expenses and disbursements such as experts’ fees, medical report fees and in certain cases Barristers’ fees. However in certain circumstances Barristers may also be willing to act under a CFA, so they too are only paid by the client in the event of a win.
The Success Fee
As stated above if the solicitor wins the case he can charge a success fee to the client, as well as his normal fees.
In person injury claims the success fee is often fixed by rules, and in straight forward road traffic accident cases for example it is usually 12.5% of the normal fees if the case is concluded before Trial and 100% of the normal fees if the case is concluded after Trial.
If the CFA was entered into prior to the 1st April 2013 then the success fee can be recovered in whole or part from the other side in the event of a win. However for agreements from the 1st April 2013 onwards, save in limited circumstances (e.g. asbestosis type claims) the success fee is not recoverable from the other side and the client shall remain liable for it in the event of a win subject to a cap of 25% of certain parts of the compensation obtained for the client.
What does the client pay if he/she loses?
The client will not have to pay his own solicitor’s fees save for any expenses/disbursements as stated above. However it is likely that the client will have to pay some or most of the other party’s (i.e. the winner’s) costs, which might be quite substantial.
Protection against paying the costs of the other side
It is possible to protect a client’s position so far as losing and paying the other side’s costs are concerned, by getting after the event (“ATE”) insurance.
There will be a premium involved, which is not recoverable from the other party even if the case is won. The client may have to fund this himself, or sometimes it is possible to get a deferred and self-insured premium so that it does not have to be paid until the end of the case and possibly not at all unless the client wins the case and gets compensation.
The main advantages of a CFA
It enables the solicitor and the client to share the risks and costs of litigation.
If the case is lost, the client might only have to pay expenses/disbursements.
The main disadvantage of a CFA
If the case is won, then in addition to the normal costs of the solicitor (to the extent that these costs are not recovered from the other party), the client will also have to pay the success fee subject to any cap.
Free Half Hour Interview
At Maples we can offer you a free half hour interview during which we can not only assess the merits of any personal claim that you may have, but we can also consider your eligibility for a CFA and whether or not it is the most suitable method of funding for your case.
If you want further advice about a personal injury claim and or a CFA, then please contact Daven Naghen on 01775 722261 or email firstname.lastname@example.org or write to us at Maples Solicitors LLP 23 New Road Spalding Lincolnshire PE11 1DH.