Conditional fee arrangements

Apart from family or criminal matters, many types of claim are suitable for a conditional fee agreement, commonly known as 'no win, no fee'.

Apart from family or criminal matters, many types of claim are suitable for a Conditional Fee Agreement, commonly known as 'no win, no fee'.

If your claim is successful:

 In a 'no win, no fee' agreement your solicitor will only be paid if the claim is successful. He or she will also be entitled to an extra fee (known as a success fee). The losing party normally pays both the basic fee and this extra fee in whole or part.
 
There are other incurred costs (such as court fees or the fee for a medical report). These are normally known as disbursements. Again, the losing party should pay all or part of these costs.

You are liable to pay your solicitor for any costs that the losing party is not ordered to pay.

New rules on conditional fee agreements (CFAs) came into force on 1 April 2013. Clients who enter into a CFA on or after 1 April will have to pay the success fee and any after-the-event (ATE) premium from their damages.

These changes have been brought about by sections 44 and 46 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 and the Conditional Fee Agreements Order 2013.

On 13 June 2014 the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 came into force. The regulations will apply to retainers, including CFAs, entered into on or after that date and impose a new statutory regulatory regime for certain consumer contracts.

Clients must now be advised that they have 14 days to exercise their right to cancel the agreement in certain circumstances.

If your claim fails:

 You will not have to pay your own solicitor, but you will still probably have to pay the costs of the successful party - the other side. Also, you will have to pay any other incurred costs (such as court fees or the fee for a medical report). These are normally known as disbursements.

However, your solicitor will normally be able to arrange insurance to cover this risk. This is known as 'after the event' insurance. You may have to pay the insurance premium.

For a 'no win, no fee' arrangement to be valid, the solicitor has to complete a number of formalities and give you pieces of information at various stages.

(Source: The Law Society http://www.lawsociety.org.uk/home.law )

 

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