What is a conditional fee agreement?

A Conditional Fee Agreement (CFA) is a type of funding arrangement where your solicitor’s fees are only payable if your claim is successful. It is commonly used in cases such as personal injury, accident claims and medical or dental negligence.

How does a conditional fee agreement work?

A Conditional Fee Agreement is the contract between you and your solicitor when you make a claim for compensation against another party.

If your case is successful, your solicitor will deduct a success fee from your compensation, which is usually up to 25% of the damages you recover. This is agreed in advance so you know exactly what to expect.

This means that you carry less risk when making a claim, because you are not left with the bill for the legal work should your claim be unsuccessful.

You should agree the terms of your Conditional Fee Agreement with your solicitor before your claim begins.

If your claim succeeds, the defendant usually pays many of the additional costs, such as court fees, medical reports and barristers’ fees. We will explain which costs are covered and whether you may need insurance to protect against expenses if your case is unsuccessful.

If you lose the case, you will not be required to pay your solicitor and, in most cases, you will not be required to pay the defendant’s legal costs.

Since 2013, success fees are no longer paid by the losing party. Instead, they are deducted from the client’s compensation.

When you sign your Conditional Fee Agreement, you do not have to pay your solicitor any fees upfront, and this is where it differs from other legal services.

Your solicitor will carefully review your case before agreeing to proceed. The reason for this is that if they are not successful, they will not get paid. A key benefit of a Conditional Fee Agreement is that your solicitor will usually only take the case on if they believe you have a good chance of winning. In most cases, you will also be offered a free consultation before proceeding.

As part of your Conditional Fee Agreement, your solicitor will:

• Meet with you to discuss your claim. You can explain what has happened, the nature of the help you need, how this has affected your day-to-day life, and why another party is to blame.
• Assess how likely you are to receive compensation from the other party (the defendant).
• Explain the costs involved, including the firm’s fee structure and any additional costs for medical experts or other specialists.
• Go through the agreement with you and make sure you are happy and clear about everything before you sign.

A Conditional Fee Agreement is a written contract between you and your solicitor, and is legally binding. You should make sure you understand it fully, and that your solicitor has explained every aspect of it before you proceed.

You should also make sure there are no areas of uncertainty. For example, you need to know whether you are liable to pay a fixed fee if you win the case, or whether the payment will be a percentage of the compensation awarded.

You should not feel pressured to proceed. The Conditional Fee Agreement must be in place before your claim starts, and all fees should be agreed and set out in the agreement.

The agreement covers what percentage of any compensation awarded will be paid to the solicitor for their time and expertise, or whether you will pay a fixed fee.

It is common for cases to be emotionally challenging and time-consuming. While a Conditional Fee Agreement removes much of the financial risk, you should still be aware that your case may take some time to conclude.

Does a conditional fee agreement need to be signed?

A Conditional Fee Agreement must be put in writing and should set out the specific conditions relating to your claim.

If the agreement is not signed, there may still be situations where it is considered legally binding if you later wish to dispute any of its clauses. For this reason, your solicitor should always ensure that both parties sign the agreement as evidence that you have each agreed to its terms.

What is a damages based agreement?

A Damages Based Agreement (DBA) is another type of funding arrangement where your solicitor’s fee is taken as a percentage of the compensation you receive. Under this agreement, your solicitor shares the risk with you, as they are only paid if your claim is successful.

What if my claim is unsuccessful?

Your solicitor will carry out a full analysis to determine how likely your case is to succeed before you start. Of course, there are no guarantees when it comes to compensation claims, and you may want to consider taking out an “after the event” insurance policy.

Some people are already covered for certain legal expenses under existing insurance policies. If not, your solicitor can discuss suitable options with you to give you peace of mind.

Conditional Fee Agreement breach of contract

If you believe the terms of your Conditional Fee Agreement have been breached, you may need to seek separate legal advice. This should set out how the contract has been breached and the extent of any loss you believe you have incurred.

What types of legal claims does the conditional fee agreement relate to?

At Natasha Hall Law, we can act under Conditional Fee Agreements or Damages Based Agreements for a range of claims, including personal injury, medical and clinical negligence, dental negligence and certain housing or landlord claims.

Which law covers Conditional Fee Agreements in the UK?

Conditional Fee Agreements sit under the Courts and Legal Services Act 1990, later shaped by the LASPO reforms in 2012. These laws explain when a solicitor can act on a “no win, no fee” basis and how the success fee works. The Solicitors Regulation Authority keeps an eye on how firms handle these arrangements, so everything stays fair and above board.

Which law covers Conditional Fee Agreements in the UK?

Conditional Fee Agreements sit under the Courts and Legal Services Act 1990, later shaped by the LASPO reforms in 2012. These laws explain when a solicitor can act on a “no win, no fee” basis and how the success fee works. The Solicitors Regulation Authority keeps an eye on how firms handle these arrangements, so everything stays fair and above board.

Do I really need ATE insurance?

In most personal injury claims, yes, it’s a good idea. This type of policy covers expert fees and the other side’s costs if your case doesn’t go your way. Your lawyer will usually arrange it on your behalf and include the premium as one of the disbursements in your agreement. It’s there so you don’t have to worry about being left out of pocket later.

Are there other ways to pay for legal representation?

There are. Some clients prefer to pay normal fees upfront, while others rely on existing legal expenses cover or support from a trade union. A Conditional Fee Agreement is just one option, but it’s often the simplest. If you’d like to explore an alternative, speak to your solicitor, they can look at your circumstances and help you decide what’s best.

Can a CFA ever be invalid?

It can happen, though it’s rare. If the written agreement isn’t signed or doesn’t clearly explain the solicitor’s success fee or other disbursements, there could be problems later. Always ask for a copy, read it carefully, and verify that every cost is listed before you accept it. Having that documentation protects everyone involved.

What if I change my mind or want to switch solicitors?

That’s possible, but timing matters. If you change lawyer halfway through a case, you may still need to pay for work already done on your behalf. Each situation is different, so it’s essential to speak to your new solicitor first. They’ll look at the details and make sure everything is handled properly and with respect to the original agreement.

How does a solicitor’s success fee actually work?

When a claim is settled, the solicitor’s success fee comes from a small percentage of your compensation. In the majority of personal injury cases, the deduction is capped at 25% and doesn’t affect future care costs. The idea is simple: your solicitor shares the risk, so they only get paid if you do.

What should my solicitor explain before I sign anything?

Good solicitors take time to go through the merits of your claim, explain how costs work, and make sure you understand every part of the document before you sign. Under SRA rules, transparency isn’t optional, it’s essential. If something doesn’t make sense, ask. Your lawyer should answer openly and clearly so you can make an informed decision.

How long do these cases usually take?

There’s no one answer. Some personal injury matters settle quickly if liability is accepted early, while others involve more detailed litigation and take longer. Your solicitor should keep you updated and let you know what stage things are at. It’s perfectly fine to ask for details or clarification as your claim progresses.

Will I have to pay tax on my compensation?

Generally, no. Personal injury compensation isn’t taxable, but remember your solicitor’s success fee and any agreed disbursements are deducted before you’re paid. If anything looks unclear, ask your solicitor to explain the breakdown, it’s better to get a straight answer now than to worry about it later.

What kinds of claims can use a Conditional Fee Agreement?

Most people associate CFAs with personal injury, but they can also apply to medical negligence, housing disputes, or other civil matters. Essentially, if your solicitor believes your case has solid merits, they may offer to act under this type of arrangement. It’s worth a conversation to see if your situation qualifies.

Should I be nervous about unexpected legal costs?

You shouldn’t need to be. When a CFA is set up correctly, everything, from expert fees to other disbursements, is written down in the agreement. You only pay if the case succeeds. If anything feels unclear, just contact your solicitor and ask them to walk you through it. They’ll want you to feel comfortable with every detail before the case moves ahead.