What is a Conditional Fee Agreement (CFA)?
A Conditional Fee Agreement (CFA), commonly called “no win no fee”, is the funding arrangement used for almost all UK personal injury and clinical negligence claims. Under a CFA, you pay nothing if the claim is unsuccessful. If the claim succeeds, your solicitor recovers their basic fees from the defendant and a “success fee” (a percentage uplift) from your compensation, capped at 25 per cent under the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO).
In this guide
- How a CFA Actually Works
- The 25% Success Fee Cap
- What “Costs” Means in a CFA
- After-the-Event (ATE) Insurance
- What You Will Actually Receive
- What to Check Before Signing a CFA
- Comparing CFA Offers Between Solicitors
- Common Questions About CFAs
- Related Guides
- Our Partner's Fees Explained
- Check If You Could Claim Compensation For Your Injury
CFAs replaced the older Legal Aid system for most personal injury work in 1995 and were reformed in 2013 by LASPO. The current framework — CFA plus After-the-Event (ATE) insurance — is well-understood by solicitors and claimants alike. This guide explains exactly how it works, what you pay, what protections apply, and how to assess different solicitors’ CFA terms.
How a CFA Actually Works
A CFA has three components in practice:
- Basic costs — the solicitor’s standard fees, recovered from the defendant if the claim succeeds
- Success fee — a percentage uplift on the basic costs, paid by you from compensation if the claim succeeds, capped at 25 per cent
- After-the-Event (ATE) insurance — covers disbursements (medical reports, expert evidence) and protects against adverse costs orders if the claim fails
If the claim fails, you typically pay nothing — the solicitor takes no fee, and ATE insurance covers the disbursements. This protection is what makes “no win no fee” genuinely no-cost-to-you. If the claim succeeds, the basic costs come out of the defendant’s payment (separate from your compensation), and the success fee comes from your damages.
The 25% Success Fee Cap
LASPO 2012 introduced a strict cap on the success fee. The maximum success fee in personal injury and clinical negligence cases is:
- 25 per cent of damages for pain, suffering, and loss of amenity (general damages)
- 25 per cent of general damages and past losses for past financial losses
- Zero per cent on future losses (the cap excludes future losses)
- The 25 per cent is inclusive of VAT
In practice this means that for most personal injury claims, the success fee is genuinely capped at 25 per cent of the bulk of your damages. For catastrophic injury cases (where future losses dominate), the effective success fee is much lower as a percentage of total damages — sometimes only 5-10 per cent of the overall settlement.
What “Costs” Means in a CFA
UK litigation costs work on a “loser pays” principle. If you win, the defendant pays:
- Your solicitor’s basic costs at the standard hourly rate
- Court fees and disbursements (medical reports, expert evidence)
- Reasonable counsel’s fees if a barrister was instructed
If you lose, in principle the losing party pays the winning party’s costs. ATE insurance covers this risk for you. Qualified One-Way Costs Shifting (QOCS) — introduced alongside LASPO — provides additional protection by preventing defendants from recovering costs against unsuccessful claimants in most personal injury cases, except where the claim was struck out, was fundamentally dishonest, or where the claimant made a Part 36 offer and beat it.
After-the-Event (ATE) Insurance
ATE insurance is taken out after the cause of action has accrued (after the accident) to cover the costs risk. Modern ATE policies for personal injury work typically cover:
- Disbursements — medical reports, expert fees, court fees, search fees
- The defendant’s costs if the claim fails (above QOCS protection)
- Counsel’s fees in some arrangements
ATE premiums are typically self-funding — the premium is only paid if the claim succeeds, and the premium itself was previously recoverable from the defendant (no longer the case after LASPO except for clinical negligence ATE on certain disbursements). Specialist firms have established relationships with ATE insurers and arrange cover as standard.
What You Will Actually Receive
For a £40,000 personal injury settlement, the typical breakdown is:
- Compensation award: £40,000
- Less: success fee (25% of general damages and past losses) — typically £6,000-£9,000 depending on the breakdown
- Less: ATE premium (where applicable) — typically £500-£1,500
- Less: deductions for Compensation Recovery Unit (recoverable benefits/sick pay)
- Net to claimant: typically £29,000-£33,500
For larger settlements with substantial future losses, the proportion deducted is smaller because the cap excludes future loss components. The defendant pays the basic legal costs separately, so the solicitor’s standard fees do not come out of your compensation.
What to Check Before Signing a CFA
- The success fee percentage — should be at or below the 25 per cent cap
- The “definition of win” — usually any monetary recovery, but check the fine print
- What happens if you lose — confirm no fees are payable and ATE covers disbursements
- The hourly rates — affects the basic costs the defendant will be asked to pay
- The termination provisions — what happens if you change solicitor or the firm stops acting
- The disbursements arrangement — typically funded by the firm under the ATE policy
- Whether there are any “premium” elements not within the standard cap
Specialist firms typically follow industry standard CFA terms. Some firms add additional charges (sometimes called “client care fees” or “case management fees”) that are outside the success fee cap — be alert to these.
Comparing CFA Offers Between Solicitors
The headline 25 per cent success fee is the same across reputable firms. The genuine differences are:
- Quality of the firm — accreditation (APIL senior litigator, AvMA for clinical negligence)
- Specialism in your specific injury type
- Experience handling cases of similar value
- Communication style and accessibility
- Geographic location if face-to-face meetings matter
- Hourly rates (affecting basic costs the defendant pays — high rates don’t affect you but may affect settlement negotiations)
Common Questions About CFAs
Is “no win no fee” really free if I lose?
With a properly structured CFA plus ATE insurance, yes. If the claim fails, you pay no solicitor fees and ATE covers the disbursements. QOCS protects against the defendant’s costs in most personal injury cases. The arrangement has been deliberately structured this way to make access to justice possible for people who cannot afford to fund litigation themselves.
Why is 25 per cent the cap?
LASPO set the cap to balance access to justice (claimants need to be able to fund cases) against the cost of compensation being eaten by legal fees. The 25 per cent figure was chosen as the maximum that would still leave the claimant with the substantial majority of their compensation. Before LASPO, success fees were typically 100 per cent and were paid by the defendant rather than the claimant — the reform shifted the burden but capped the percentage.
Can my solicitor charge less than 25 per cent?
Yes — the 25 per cent is a maximum, not a fixed figure. Some firms charge lower percentages for stronger cases or for higher-value cases. The CFA you sign should state the specific percentage. Be alert to firms quoting “no win no fee” without specifying the success fee — the standard 25 per cent figure should be visible upfront.
What if I want to change solicitor partway through?
You can change solicitor at any time, but the terms of your CFA may give your previous solicitor a right to recover their fees from any eventual settlement. Specialist firms generally allow clean handovers without claiming on completed work. The new firm typically takes over the case under a fresh CFA. Check the termination terms in any CFA before signing.
Are there cases CFAs don’t cover?
Some claims are difficult to fund on a CFA basis — low-value cases that don’t justify the work, cases with poor prospects of success, or cases where ATE insurance is not available. Specialist firms may decline cases for these reasons. Where they do, they will explain why. Some cases are funded under different arrangements (Damages-Based Agreements, hourly rate, fixed fee) but CFA remains the dominant model.
Related Guides
Personal Injury Compensation Calculators (all)
How Much Compensation Could I Receive?
Personal Injury Claim Time Limits UK
How Long Does a Personal Injury Claim Take?
Special vs General Damages in PI Claims
Check If You Could Claim Compensation For Your Injury
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