Law Society Conditional Fee Agreements (CFAs) are a type of legal funding arrangement that have become increasingly popular in recent years. Also known as “no win, no fee” agreements, they allow claimants to pursue a legal claim without having to pay upfront legal fees. Instead, the legal costs are only paid if the claim is successful, with the solicitor’s fees being paid as a percentage of the damages recovered.
CFAs were originally introduced to enable people who did not qualify for legal aid to still access justice. However, they have since become widely used in all types of civil litigation, including personal injury claims, commercial disputes, and employment law cases.
The Law Society, which represents solicitors in England and Wales, has developed model CFA agreements that are designed to protect clients and ensure that they understand the costs involved in pursuing a claim. These agreements must comply with certain regulations set out by the Solicitors Regulation Authority (SRA), which is responsible for regulating solicitors in England and Wales.
One key feature of Law Society CFAs is that they must include a “success fee” payable to the solicitor if the claim is successful. This fee is calculated as a percentage of the solicitor’s normal hourly rate and is intended to reflect the risks the solicitor is taking by agreeing to work on a no win, no fee basis. The success fee is typically capped at 25% of the damages recovered.
Law Society CFAs must also include a “client care letter” that sets out the terms and conditions of the agreement in plain language. This letter must explain how the solicitor’s fees will be calculated and how the client’s liability for costs will be affected if the claim is successful.
Critics of CFAs argue that they can be expensive for clients because of the success fee, and that they can encourage solicitors to take on weak cases because they are only paid if the claim is successful. However, supporters of CFAs point out that they enable people to pursue claims that they might not otherwise be able to afford, and that they encourage solicitors to work harder to achieve a successful outcome.
In conclusion, Law Society Conditional Fee Agreements are an important tool for making legal claims more accessible to people who might otherwise be unable to afford them. However, it is important for clients to understand the costs involved and to choose a solicitor who is experienced in handling CFA cases. By working with a reputable and knowledgeable solicitor, clients can increase their chances of achieving a successful outcome while minimizing their financial risk.