Conditional Fee Agreements Flashcards
(12 cards)
What is a Conditional Fee Agreement?
A. A retainer where the solicitor is paid only if the case succeeds
B. A fixed-fee arrangement regardless of outcome
C. A standard hourly-fee contract
D. A public-funded legal aid contract
A. A retainer where the solicitor is paid only if the case succeeds
Explanation: Under a CFA, the solicitor’s basic fees are only payable if the client wins or settles
Which Act primarily governs CFAs in England & Wales?
A. Legal Services Act 2007
B. Courts and Legal Services Act 1990
C. Conditional Fees Act 1995
D. Access to Justice Act 1999
C. Conditional Fees Act 1995
Explanation: The CFA regime was introduced by the Conditional Fees Act 1995 and refined thereafter
Under a CFA, what is the ‘success fee’?
A. An additional percentage uplift on basic fees if the claim succeeds
B. A flat fee payable regardless of outcome
C. The client’s disbursement costs
D. Fixed VAT on legal aid cases
A. An additional percentage uplift on basic fees if the claim succeeds
Explanation: The success fee compensates the solicitor for risk, capped by regulation
In CFAs post-LASPO, what is the maximum recoverable success fee in most personal injury cases?
A. 100% of basic costs
B. 50% of basic costs
C. 25% of basic costs
D. 75% of basic costs
B. 25% of basic costs
Explanation: The Legal Aid, Sentencing and Punishment of Offenders Act 2012 caps the success fee at 25% of recoverable costs in PI matters .
A client reviews a CFA letter that omits mention of the success-fee cap. The solicitor has:
A. Met all disclosure requirements
B. Breached SRA transparency duties
C. Complied with CFA rules
D. Only needed to disclose if success fee >50%
B. Breached SRA transparency duties
Explanation: CFAs must set out the success fee rate and statutory cap in writing .
A CFA includes an ATE insurance premium. Which of these is true?
A. The client can recover the premium from the losing side in most PI claims
B. ATE premiums are never recoverable
C. ATE is only for criminal cases
D. ATE insurance is provided by the Legal Ombudsman
A. The client can recover the premium from the losing side in most PI claims
Explanation: After LASPO, ATE premiums in personal injury CFAs are recoverable
A solicitor proposes a 100% uplift success fee under a CFA for a clinical negligence case. Is this permissible?
A. Yes, in any civil claim
B. No, capped at 25% in PI, and at 100% in non-PI only with court approval
C. Yes, because non-PI claims have no cap
D. No, success fees are abolished
B. No, capped at 25% in PI, and at 100% in non-PI only with court approval
Explanation: PI capped at 25%; other cases can have up to 100% but require court sanction
A client wins under a CFA and is awarded basic costs. Who pays the success fee?
A. Opponent pays it directly
B. Client pays it out of their damages
C. It is offset against the opponent’s costs order
D. The court waives it
B. Client pays it out of their damages
Explanation: The success fee is payable by the client from their damages award, up to the statutory cap
Which disclosure is NOT required in a CFA client care letter?
A. The success-fee percentage
B. Whether the client can switch to hourly billing
C. That the successful opponent will not pay the success fee
D. Details of ATE insurance and its recoverability
C. That the successful opponent will not pay the success fee
Explanation: It is obvious the opponent does not pay, so this need not be stated; all other elements must be disclosed
A solicitor enters a CFA without written client agreement. The CFA is:
A. Valid if confirmed orally
B. Void and unenforceable
C. Enforceable if signed by COFA
D. Valid after filing with the court
B. Void and unenforceable
Explanation: CFAs require written client signature to be binding
Under a CFA, when must the solicitor provide the client with an explanation of alternative funding options?
A. Only after the case ends
B. At the outset, before entering into the CFA
C. Never; CFAs are self-explanatory
D. After the first settlement offer
B. At the outset, before entering into the CFA
Explanation: Solicitors must explain all funding options—legal aid, private pay, CFA—before agreement
A CFA’s success fee agreement is silent on the event of an early settlement. This omission means:
A. The full success fee is still payable
B. It is implied that the success fee is reduced pro rata
C. The CFA is invalid for settlement
D. The client may not have agreed to anything, making enforcement uncertain
D. The client may not have agreed to anything, making enforcement uncertain
Explanation: The CFA must specify how the success fee applies on settlement; silence creates ambiguity and risk of unenforceability
