‘No‑win, no‑fee’ agreements, formally known as Conditional Fee Agreements (CFAs), remain a key funding mechanism in UK litigation, particularly in professional negligence, personal injury and employment claims. Properly drafted, a CFA can provide access to justice by allowing a client to pursue a claim without paying legal fees upfront, with the solicitor’s remuneration linked to the outcome of the case. However, where CFAs are unclear, non‑compliant or inadequately explained, they risk being found unenforceable and can give rise to professional negligence and regulatory issues for solicitors. At LexLaw, we help clients and legal professionals navigate the complexities of conditional fee agreements to ensure transparency and compliance with regulatory standards.

Understanding Conditional Fee Agreements and Success Fees

A Conditional Fee Agreement is a statutory funding arrangement under section 58 of the Courts and Legal Services Act 1990, where a solicitor’s basic charges are payable only if the case is successful, often with an additional “success fee” uplift. Since the post-April 2013 reforms, success fees are generally no longer recoverable from the opposing party and must usually be paid by the client from damages, subject to specific caps in certain categories such as the 25% limit in personal injury cases. For a CFA to be enforceable, it must comply with the statutory and regulatory framework, including clearly stating the success fee as a percentage uplift on base costs and setting out when and how that success fee will be payable.​

Disputes often arise where agreements are unclear about partial success, the handling of third-party costs or liability for disbursements. For instance, if a claim is partially successful or settles on terms differing from those originally envisaged, ambiguity in the CFA may lead to disagreement over whether a client is liable for a proportion of fees or disbursements. Similarly, if success fees are not properly disclosed or explained in accessible language, clients may face unexpected financial obligations at the conclusion of their case. Courts have become increasingly willing to scrutinise whether clients gave informed consent to their solicitors’ charging arrangements, and whether the retainer documentation and accompanying explanations were sufficiently clear.

SRA Transparency Requirements and Informed Consent

The SRA’s Standards and Regulations, including the Transparency Rules and Codes of Conduct, require solicitors to ensure that clients receive clear, accessible and accurate information about pricing, funding options and likely overall costs. This includes explaining how a CFA operates, how any success fee is calculated, when it is triggered, whether it is capped, and whether alternative funding models may be more appropriate in the circumstances. The obligation is ongoing: clients must be kept updated as the matter progresses, especially if costs estimates change or if risk assessments and prospects of success are revised.​

Recent authorities have reinforced that informed consent is essential to the enforceability of CFAs and to the solicitor’s ability to recover fees from their own client. In Belsner v CAM Legal Services Ltd EWCA Civ 1387, the Court of Appeal held that solicitors must obtain informed consent before deducting success fees from damages, emphasising that clients must be put in a position to make informed decisions about entering into CFAs and about agreeing to deductions from damages. Where information is partial, overly complex or buried in dense small-print without adequate explanation, the solicitor may struggle to demonstrate that the client genuinely understood the arrangement. Judges are increasingly prepared to look beyond the written CFA and examine the full course of communications between solicitor and client, including costs estimates, emails, advice notes and attendance records.

Common Problems: Unclear Success Fees and Partial Success Scenarios

Disputes frequently arise where CFAs fail to specify the success fee in percentage terms, or where the drafting is so unclear that the court cannot determine what uplift was agreed. In such circumstances, CFAs have been held wholly unenforceable, with solicitors unable to recover any fees, and with no ability to salvage the arrangement by severing defective success fee clauses. Other problematic areas include opaque provisions on liability for disbursements, counsel’s fees and third-party costs, particularly in scenarios where the client’s claim is only partially successful or where settlement is reached on terms differing from those originally anticipated.​

Partial success disputes often occur when CFAs contain staged or tiered success fees linked to outcomes such as beating a Part 36 offer or exceeding a particular damages threshold, but fail to spell out exactly what happens if the outcome falls somewhere in between. Clients may then be confronted with invoices or deductions they did not anticipate, arguing that they were led to believe that “no win, no fee” meant they would bear little or no costs risk. Where the court concludes that the CFA does not clearly allocate risk in partial success scenarios, or that key charges were not adequately flagged at the outset, the agreement may be construed against the drafting solicitor or declared unenforceable. This underscores the critical importance of clear drafting and comprehensive client explanations at the outset of the retainer

Challenging Defective ‘No-Win, No-Fee’ Agreements

Clients may challenge a ‘no-win, no-fee’ agreement on multiple grounds, including statutory non-compliance, unfair or unclear terms, and failures in advice or disclosure that amount to professional negligence. A typical challenge involves close examination of the CFA, the accompanying client care documents, costs estimates and all communications relating to funding options, risk and likely deductions from damages. The central question is often whether the client was provided with sufficient, intelligible information to give informed consent to the solicitor’s charging structure and to the specific success fee arrangement.​

Where a CFA is found non-compliant or inadequately explained, the consequences can be severe for solicitors. Courts may declare the CFA unenforceable in whole, leaving the solicitor unable to recover any costs from the client, or may order a substantial reduction on assessment where the charges are held to be unfair or disproportionate. In some cases, the client may bring a professional negligence claim alleging that, had they been properly advised about the true extent of potential deductions or about alternative funding options, they would not have proceeded on the terms agreed or might have chosen a different solicitor. Outcomes in such disputes can include the setting aside or repayment of fees, as well as broader regulatory and reputational consequences for the firm.​

Implications for Clients and Legal Professionals

For clients, unclear CFAs can lead to unexpected financial liability at the conclusion of a case and can undermine confidence in both the legal process and their chosen advisers. Clients who discover that a substantial portion of their damages is earmarked for success fees, disbursements or other charges may feel misled if these deductions were not clearly signposted from the outset. Where there is genuine uncertainty or surprise about the final bill, clients should consider obtaining independent advice on the enforceability of the CFA and the fairness of the charges, including pursuing detailed assessment or complaint routes where appropriate.​

For solicitors and law firms, non-compliant or poorly explained CFAs carry a double risk: loss of fees through unenforceability and exposure to negligence and regulatory action. Best practice includes adopting clear, plain-language CFA templates that state the success fee as a percentage, specifying how and when it is payable, and addressing in straightforward terms the client’s liability for disbursements, shortfalls and third-party costs. It is equally important to supplement written agreements with robust, documented explanations, including tailored costs letters, worked examples of likely deductions, and attendance notes evidencing the discussion of funding options. Courts and regulators increasingly expect solicitors to treat transparency over fees as a core professional duty rather than a mere administrative exercise.

How LexLaw Can Help with CFA Disputes and Professional Negligence Claims

At LexLaw, we provide specialist guidance to both clients and legal professionals on conditional fee agreement disputes and professional negligence claims arising from unclear or defective CFAs. For clients facing unexpected costs under ‘no-win, no-fee’ agreements, we review CFAs to determine whether terms were adequately explained and whether any liability for fees or disbursements can be challenged based on non-compliance or lack of informed consent. We advise on negotiating settlements of disputed fees and, where necessary, represent clients in detailed assessment proceedings, court litigation and mediation to recover improperly deducted sums or challenge unenforceable agreements.​

For solicitors and law firms, we assist in auditing CFAs to ensure compliance with SRA transparency requirements and current case law including the informed consent principles established in Belsner v CAM Legal Services Ltd. By combining regulatory knowledge with practical litigation experience, LexLaw ensures that clients’ rights are protected and professionals can operate with confidence and clarity. Contact LexLaw today for expert advice on conditional fee agreement challenges and professional negligence matters.