A conditional fee agreement (CFA) is a contract between you and a solicitor under which the solicitor agrees to take no legal fee, or a reduced fee, if your personal injury claim is unsuccessful. If your claim succeeds, the solicitor's base fee is paid—usually by the losing party—and you may also be required to pay a success fee to the solicitor. CFAs have been permitted in England and Wales since the Courts and Legal Services Act 1990 was amended, and the current framework is set out in The Conditional Fee Agreements Order 2013. personal injury claims no win no fee legal costs personal injury success fees explained after the event insurance

This guide explains how conditional fee agreements work in personal injury claims, the fees and costs involved, what happens if you lose, and what you should check before signing. It applies to England and Wales; Scotland and Northern Ireland have different arrangements.

What is a conditional fee agreement?

A conditional fee agreement is a formal contract between a client and a solicitor. Under a CFA, the solicitor agrees to act for you and defer some or all of their legal fee until the outcome of your case is known. If your claim is successful—meaning you receive compensation, either through settlement or a court judgment—you pay the solicitor's standard legal costs (the "base costs") and, in most cases, an additional "success fee." If your claim fails, you pay nothing, or a reduced amount, to your solicitor for their work.

The legal basis for CFAs is found in section 58 of the Courts and Legal Services Act 1990, as amended by the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO). The Conditional Fee Agreements Order 2013 sets out the detailed requirements, including the maximum success fee and the information that must be given to clients. The Explanatory Memorandum to that Order provides further context on the 2013 reforms.

CFAs are sometimes referred to by the shorthand phrase describing their core feature: the solicitor charges a fee only if your claim succeeds. However, it is important to understand that "success" is defined in the agreement, and other costs—such as disbursements and insurance premiums—may still apply even if you lose.

How does a CFA work in a personal injury case?

When you instruct a solicitor on a conditional fee basis, you sign a written agreement that sets out:

  • The circumstances in which you will pay the solicitor's fees.
  • The amount of the success fee (if any) and how it is calculated.
  • What happens to costs and disbursements if you lose.
  • Whether you need after-the-event (ATE) insurance and who pays the premium.
  • How costs recovered from the other side will be applied.

The solicitor conducts your claim as they would under any other retainer. They gather evidence, correspond with the defendant or their insurer, and may issue court proceedings if settlement cannot be reached. If your claim succeeds, the defendant (or their insurer) is typically ordered to pay your reasonable legal costs. Those base costs are assessed either by agreement between the parties or, if disputed, by the court under the Civil Procedure Rules Part 44.

Under the post-LASPO regime, the success fee is no longer recoverable from the losing party; it is deducted from your compensation. The Legal Aid, Sentencing and Punishment of Offenders Act 2012, Explanatory Notes, paragraph 281 explains that this change was intended to reduce costs borne by defendants and insurers, while ensuring claimants retained a greater share of their damages by capping the success fee.

The success fee: what it is and how much you pay

The success fee is an additional charge your solicitor may add to their base costs if your claim is won. It reflects the risk the solicitor has taken in agreeing to act without payment if the claim fails. The success fee is expressed as a percentage of the solicitor's base costs (not your damages).

Since April 2013, success fees in most personal injury cases have been capped at 25 per cent of the damages awarded (excluding damages for future care and loss). This cap is set out in The Conditional Fee Agreements Order 2013. The cap applies to the success fee taken from your compensation; the solicitor cannot take more than 25 per cent of your general and past special damages to cover the success fee.

For example, if you are awarded £10,000 in general damages and past losses, and your solicitor's base costs are £5,000, the success fee might be calculated as a percentage of those base costs. However, whatever that calculation produces, the solicitor cannot deduct more than £2,500 (25 per cent of £10,000) from your damages to cover the success fee.

The actual percentage uplift on base costs that a solicitor may charge varies by case and must be set out in your agreement. The SRA guidance on 'No win, no fee' and other fee arrangements in high-volume consumer claims reminds solicitors that they must ensure clients understand the success fee calculation and that the fee is fair and transparent.

What costs do you pay if you lose?

If your claim is unsuccessful, you do not pay your solicitor's legal fees under a conditional fee agreement. However, you may still be liable for:

  • Disbursements: out-of-pocket expenses your solicitor has incurred on your behalf, such as court fees, medical report fees, or expert witness costs. Your CFA should state whether you must pay these if you lose, or whether they are covered by after-the-event insurance.
  • The other side's costs: in civil litigation in England and Wales, the usual rule is that the losing party pays the winner's legal costs. If your claim fails and you do not have cost protection, you could be ordered to pay the defendant's costs. In practice, most claimants take out after-the-event (ATE) insurance to cover this risk.

After-the-event insurance is a policy you buy after the legal dispute has arisen. It covers the opponent's costs (and sometimes your own disbursements) if you lose. If you win, the ATE premium may be payable out of your damages, or in some cases the premium is deferred and only payable on success. The SRA's consumer guide to 'No win, no fee' agreements explains that you should ask your solicitor to explain clearly who pays the insurance premium and when.

CFAs and road traffic accident claims

Conditional fee agreements are widely used in road traffic accident (RTA) claims. Many RTA personal injury claims in England and Wales are now processed through the Official Injury Claim portal, introduced following the Civil Liability Act 2018. For claims that fall within the portal's scope—broadly, RTA injuries valued up to £5,000 where liability is admitted—fixed costs apply. This means the amount of legal costs the defendant's insurer will pay is set by statute, regardless of the actual work your solicitor does.

In portal cases, your solicitor's base costs may be constrained by the fixed recoverable costs regime under the Civil Liability Act 2018. If the fixed costs are lower than the solicitor's usual charges, the solicitor cannot recover the shortfall from the defendant. Under a CFA, the solicitor still cannot charge you more than the capped success fee (25 per cent of damages), so the firm absorbs any difference between the fixed costs and their standard fee.

Outside the portal—for higher-value claims, disputed liability, or injuries that do not meet the portal criteria—costs are typically assessed on the standard basis under CPR Part 44. The same CFA rules apply: base costs are recovered from the defendant if you win, and you pay the success fee from your damages up to the 25 per cent cap.

What to check before signing a CFA

Conditional fee agreements must be in writing and signed by both you and your solicitor. The Conditional Fee Agreements Order 2013 requires the agreement to state clearly the success fee percentage (or the maximum percentage) and the circumstances in which it is payable. Before you sign, you should satisfy yourself that:

  • The agreement explains in plain language when you will pay costs and when you will not.
  • The success fee percentage is set out, along with the cap (currently 25 per cent of relevant damages).
  • The treatment of disbursements is clear: will you pay them if you lose, or are they insured?
  • The solicitor has explained after-the-event insurance: whether you need it, the likely premium, when it is payable, and whether the premium is deducted from your damages if you win.
  • You understand what "success" means in your case. The CFA should define the circumstances that count as a win (for example, receiving any compensation, or exceeding a minimum threshold).
  • The agreement states how costs recovered from the other side will be applied—typically, the defendant's payment covers the solicitor's base costs first, and the success fee is then taken from your compensation.

The SRA consumer guidance recommends that you ask questions if anything is unclear and consider seeking independent advice before signing if the terms seem unfair or confusing. Solicitors are required to treat clients fairly and provide clear information about costs under the SRA Standards and Regulations.

What this means for you

If you are considering making a personal injury claim and cannot afford to pay a solicitor's fees upfront, a conditional fee agreement may allow you to instruct a regulated solicitor without immediate cost. You should understand that:

  • CFAs must be in writing and signed. The agreement should clearly explain all fees, disbursements, and insurance arrangements.
  • If your claim succeeds, the success fee (capped at 25 per cent of your general damages and past losses) will be deducted from your compensation.
  • If your claim fails, you pay nothing to your solicitor for their work, but you may still owe disbursements and the opponent's costs unless you have insurance.
  • After-the-event insurance is commonly used to protect against the risk of paying the other side's costs; check when and how the premium is paid.
  • In road traffic claims processed through the Official Injury Claim portal, fixed costs may apply, which can limit what your solicitor recovers from the insurer but does not change the 25 per cent success fee cap on your damages.

This is general information about how CFAs work in England and Wales; it is not legal advice on whether a CFA is right for your situation.

Alternatives to conditional fee agreements

Conditional fee agreements are not the only way to pay for legal representation. Alternatives include:

  • Private retainer (paying as you go): you pay the solicitor's hourly rate or fixed fee regardless of outcome. This option is less common in personal injury work because of the cost.
  • Legal expenses insurance: if you have motor, home, or standalone legal expenses cover, your insurer may pay for a solicitor. Check your policy and whether the insurer appoints the solicitor or you choose your own.
  • Trade union funding: some trade unions offer free legal representation to members for workplace or RTA injuries.
  • Pro bono assistance: limited free legal help may be available from law centres or pro bono schemes, though capacity is restricted.

For many personal injury claimants, a CFA remains the most accessible route to professional representation, but you should compare the costs and risks of each option before deciding.

Regulation and complaints

Solicitors who offer conditional fee agreements are regulated by the Solicitors Regulation Authority (SRA). The SRA's guidance for consumers on 'No win, no fee' agreements sets out your rights and what to expect. If you believe your solicitor has not explained the CFA properly, has charged fees that breach the agreement, or has otherwise acted unfairly, you can complain to the firm and, if not resolved, to the Legal Ombudsman.

Claims management companies (CMCs) are not solicitors and are regulated separately. If a CMC refers you to a solicitor who then offers a CFA, the CMC may receive a referral fee. You are entitled to ask about any such arrangements and how they affect your costs. This publication does not recommend any named firms or referral services; our role is to explain how the legal framework operates.

How CFAs fit into the wider costs landscape

The reforms introduced by the Legal Aid, Sentencing and Punishment of Offenders Act 2012 fundamentally changed how conditional fee agreements work. Before April 2013, success fees and ATE insurance premiums were recoverable from losing defendants, which led to significant costs for insurers and concerns about disproportionate litigation funding. The Explanatory Notes to LASPO, paragraph 281, explain that removing recoverability was intended to reduce defendants' costs exposure and encourage earlier settlement.

Since 2013, claimants bear the success fee from their own damages (subject to the 25 per cent cap), and ATE premiums are generally not recoverable, although limited exceptions exist for clinical negligence and some other cases. These changes mean that claimants now retain less of their gross compensation than under the pre-2013 regime, but the policy intention was to strike a balance between access to justice and proportionate costs.

The GOV.UK call for evidence on costs protection for discrimination claims illustrates ongoing debate about costs rules in different types of claim; personal injury CFAs operate within the framework set by LASPO and the 2013 Order, but the broader costs landscape continues to evolve.

Summary

Conditional fee agreements provide a way for people who lack funds to pay legal fees upfront to instruct a solicitor for a personal injury claim. The solicitor takes the risk that they will not be paid if the claim fails, in return for a success fee—capped at 25 per cent of your damages—if the claim succeeds. Base costs are usually recovered from the losing party, while the success fee comes out of your compensation.

CFAs are designed to enable access to solicitor services for people who might otherwise lack the means to pursue a claim, though they are not suitable for every case or every client. Understanding the terms of your agreement, the role of after-the-event insurance, and the impact of fixed costs in portal claims will help you make an informed decision about whether a conditional fee arrangement meets your needs.

Always read the agreement carefully, ask your solicitor to explain any terms you do not understand, and satisfy yourself that the arrangement is fair before you sign.

Last reviewed: 2026-06-03

Sources

This article provides general information about the law in England and Wales. It is not legal advice. For advice on your specific situation, consult a solicitor regulated by the SRA.