A Conditional Fee Agreement, commonly known simply as a CFA , is a type of ‘No-Win, No-Fee’ legal funding. It is an arrangement between a legal representative and a client where payment of the legal fees are deferred until the end of the case and the obligation to pay those fees depends on whether the case is won or lost.

It is common for professional negligence claims to be funded by way of a CFA.

Solicitor’s Fees
If a CFA is entered into, the solicitor will agree to defer payment of his fees until the end of the case.  If the case is lost, the fees are written off, hence the term ‘no-win, no-fee’. If the case is won, the client is liable for the fees together with an uplift known as a ‘Success Fee’.  A large proportion of the basic costs can usually be recovered from the losing party but the client will be liable for any costs not recovered, plus the Success Fee.

What is a Success fee?
A Success Fee represents payment for the risk the lawyer has taken in dealing with a case where there is a chance he will not be paid for the work carried out. It is calculated as a percentage of the solicitor’s basic costs rather than being a percentage of the damages recovered, which many people assume is the case.  The percentage is set at the outset of the case based on the known risks of the case.  It takes into account the prospects of success, credibility, quality of evidence etc.  The Success Fee can be anything up to a 100% uplift on the basic costs. 

If the client is successful, he will be personally liable for the Success Fee. 

There is no cap on the amount of the success fee. In smaller value claims, the success fee can even exceed the level of damages recovered.

Counsel’s Fees
Many barristers also agree to work on a CFA basis which operates in the same way as a solicitor’s CFA.

Legal Expenses Insurance
In claims valued at over £10,000 (the small claims court threshold as at the date of this article) the loser generally pays the winner’s costs.  This means that a claimant could be responsible for paying their opponent’s legal costs if they lose. Claimants can however insure themselves against this risk and legal expenses insurance products are widely available on the market.  The premium for the insurance is payable by the client. Policies differ but most are self-insured and the premium is deferred.

Disbursements
These are expenses associated with the claim that are paid to third parties.  For example, expert’s fees, court fees, travel costs etc.  If the claim is successful, these can usually be recovered from the other side provided they are reasonable.

OUR 50% GUARANTEE

We know that legal costs are always at the forefront of a client’s mind. 

With success fees and any insurance premium being payable out of damages, together with the shortfall on the basic costs, the margins are often tight. The fact that the success fee is uncapped can be a particular concern for claimants, especially where the damages being claimed are earmarked to remedy a situation that arose as a result of the actions of the negligent professional.

So, to deal with this worry we have developed a Professional Negligence CFA funding scheme that incorporates a maximum cap on the amount you have to pay out of your damages for the combined total of the success fees, insurance premium and any costs shortfall.

We call this our 50% guarantee.

Under this scheme, if you win your claim you will not have to pay out more than one half of the damages you receive.

In other words we GUARANTEE that you will receive a MINIMUM of half of the damages paid to you.

This means that if the combined total of:

Our success fee
Counsel’s success fee*
The Legal Expenses Insurance premium* and
Any shortfall on basic costs
*provided you agree with our choice

amounts to more than one half of the damages you recover, then we will reduce our success fee so as to ensure that you receive at least one half.

Please note, this is the minimum you will receive. In most cases clients receive a considerably more than one half of the award, but our guarantee nevertheless offers valuable peace of mind and avoids the worry that at the conclusion of the claim you may be left with very little or perhaps nothing at all.

If you would like your professional negligence claim to be funded under our 50% guarantee scheme then call us on Freephone 0808 139 1595 or email us at info@proneg.co.uk