A conditional fee agreement (CFA), also known as a “no win, no fee” agreement, is a legal agreement between a client and a solicitor that allows the client to receive legal representation without having to pay any upfront fees. If the case is successful, the solicitor`s fees are paid by the losing party or a portion of the client`s compensation. If the case is lost, the solicitor does not receive any payment.
CFAs were introduced in the UK by the Access to Justice Act 1999 in an effort to increase access to justice for individuals who may not otherwise be able to afford legal representation. Since then, CFAs have become increasingly popular, particularly in personal injury cases and other areas of litigation.
CFAs are governed by the Civil Procedure Rules (CPR), which outline the requirements and procedures for entering into a CFA. The CPR requires that the agreement be in writing and signed by both the solicitor and the client. It must also include information on the solicitor`s fees, the percentage of the client`s compensation that will be paid to the solicitor if the case is successful, and any other costs that the client may be responsible for.
One of the main benefits of a CFA is that it allows individuals to pursue legal action without having to pay any upfront costs. This can be especially helpful for individuals who may not have the financial resources to pay for legal representation. Additionally, a CFA provides an incentive for solicitors to work diligently on the case, as they only receive payment if the case is successful.
However, it is important to note that there are potential risks associated with CFAs. If the case is unsuccessful, the client may be responsible for paying the opposing party`s legal fees and other expenses, which can be substantial. Additionally, some solicitors may only take on cases with a high likelihood of success, which could limit a client`s options for legal representation.
Overall, a CFA can be a helpful option for individuals who need legal representation but may not have the resources to pay upfront fees. However, it is important to carefully consider the risks and benefits before entering into a CFA, and to work with a reputable solicitor who has experience with CFAs and the CPR.