Offer a financial safeguard for clients
Include a cap or maximum limit on the solicitor's charges, ensuring cost predictability for the client
Solicitors cannot claim any costs if the case is lost, so they generally only agree CFAs if they believe the claim has a high probability of success, often above 75% chance
Commonly incorporate a 'success fee' clause, entitling the solicitor to an additional fee if the client prevails, usually a percentage of the compensation recovered, reflecting the complexity and risk of the claim
If the client emerges victorious, they cannot recover the success fee from the opposing party in addition to their costs
The loser must usually pay the winner's legal costs, meaning CFAs often include a requirement for the client to secure an 'after the event' insurance policy, covering the costs of the opposing party in the event of an unfavourable outcome, mitigating financial risk for the client