Conditional Fee Agreements (CFAs)

How Do CFAs Work?

Direct Answer: A Conditional Fee Agreement (CFA) is the formal name for a no win no fee arrangement in England and Wales. The solicitor charges nothing if the case loses. If it wins, they recover their base costs plus a success fee, which cannot exceed 100% of those base costs. Separately, in a personal injury claim no more than 25% of (a) general damages for pain, suffering and loss of amenity and (b) damages for past pecuniary loss — but not damages for future pecuniary loss, and after deducting any benefits recoverable by the Compensation Recovery Unit. That cap applies to proceedings at first instance (Conditional Fee Agreements Order 2013, arts. 4-5).

A CFA is a written agreement between you and your solicitor under which the solicitor agrees to act on the basis that their professional fees are payable only if the case succeeds. The statutory authority is section 58 of the Courts and Legal Services Act 1990, as amended by LASPO 2012.

The agreement must specify the success fee — a percentage uplift on the solicitor's normal base costs. This uplift compensates the solicitor for the risk of not being paid if the case fails. The success fee can be up to 100% of base costs, but for personal injury claims it is capped at 25% of general damages and past losses.

The CFA must clearly define what constitutes a "win." In most personal injury cases, this means recovery of damages — whether by settlement, judgment, or interim payment. The definition of success should be agreed in writing before work begins.

Pre-LASPO vs Post-LASPO CFAs

Pre-April 2013 (pre-LASPO): Success fees and ATE insurance premiums were recoverable from the losing defendant as part of inter partes costs. This meant the claimant's damages were not reduced by these charges.

Post-April 2013 (post-LASPO): Success fees are no longer recoverable from the defendant. They are deducted from the claimant's damages, subject to the 25% cap. This fundamental shift was recommended by Sir Rupert Jackson's Review of Civil Litigation Costs (2010) to rebalance the costs regime.

What Your CFA Must Contain

Under the Conditional Fee Agreements Order 2013 and SRA Code of Conduct 2019, a compliant CFA must:

• Be in writing and signed by both solicitor and client
• State the success fee percentage
• Define what constitutes "success" (a "win")
• Explain the circumstances in which the client may be liable for costs
• Set out the client's right to have costs assessed by the court
• Explain the effect of the CFA on the client's damages
• State whether the solicitor will deduct the success fee before or after costs and disbursements

Success Fee Calculation

The success fee reflects the solicitor's assessment of risk. A straightforward road traffic accident with clear liability might attract a lower success fee (e.g., 25%), while a complex clinical negligence case with disputed causation might justify a higher percentage (up to 100%).

Example: If a solicitor's base costs are £5,000 and the agreed success fee is 50%, the total solicitor fees on success would be £7,500 (£5,000 + £2,500 success fee). However, the success fee element is capped: if the claimant recovers £8,000 in general damages and past losses, the maximum success fee payable is £2,000 (25% of £8,000).

The cap applies only to the success fee, not to the solicitor's base costs, which are assessed separately and typically recovered from the defendant through inter partes costs.

Types of Cases Suitable for CFAs

CFAs are most commonly used in personal injury, clinical negligence, employment disputes, housing disrepair, and some commercial litigation. They are not suitable for all case types — solicitors will assess the merits, likely value, and prospects of success before offering a CFA. Cases with less than a 50% prospect of success are unlikely to be taken on a CFA basis.