For injured cyclists seeking compensation, a Conditional Fee Agreement (CFA) - more commonly known as a ‘no win, no fee agreement' - is the most common way to fund a personal injury claim. CFAs make legal representation accessible to all by removing the financial burden of upfront solicitors' fees, allowing claimants to focus on their recovery without worrying about legal costs.
What is a Conditional Fee Agreement (CFA)?
A CFA is a legal arrangement between you and your solicitor that ensures you won’t have to pay any legal fees upfront. In simple terms, you only pay if you win. If your claim is unsuccessful, you won’t be required to pay your solicitor’s fees. This risk-free approach allows people to pursue justice, regardless of their financial situation.
CFAs were introduced in the UK as part of the Access to Justice Act 1999, aimed at ensuring that anyone, regardless of income, could afford to make a personal injury claim. Before CFAs, many people were discouraged from seeking compensation due to the high cost of legal representation.
How does a CFA work?
When you enter into a CFA, your solicitor agrees to represent you without charging any upfront costs. If your claim is successful, their fees will be paid by the defendant or their insurer. A success fee will also be payable.
The success fee is capped by law at 25% of your compensation, ensuring that you keep the. This cap exists to ensure that claimants retain most of their compensation award.
In actuality, claimants do not forfeit the full 25% of their compensation as, thanks to a ruling by Court of Appeal, general damages awards are increased by 10% for claims funded by a Conditional Fee Agreement. This increase helps offset the impact of the success fee deduction.
What happens if my claim is unsuccessful?
One of the biggest benefits of a CFA is the peace of mind it offers to claimants.
If your claim is unsuccessful, you won’t be required to pay your solicitor’s legal fees.
This means you can claim without financial risk. However, some other costs, such as disbursements or the defendant's legal fees, could arise. To cover these expenses, No Win, No fee claims are normally underwritten with an After-the-Event (ATE) insurance policy.
Terms and conditions
Before entering into a CFA, you can discuss the terms and conditions with your solicitor. They will explain the agreement, ensuring you understand how success fees work and what costs may arise. You should ask any questions and make sure you fully understand the financial implications before starting your claim.
Written by Chris Salmon on 22nd February 2023