Resource Centre > Glossary > Conditional fee (CFA)

Conditional Fees are a form of litigation funding in the United Kingdom.

A CFA (Conditional Fee Agreement) is an agreement between a lawyer and a client according to which the lawyer gets paid only if he wins the case for the client, but if the case is won the lawyer receives his usual hourly remuneration + an 'uplift' (also referred to as 'success fee' - the uplift can be up to 100% of the normal hourly fee, depending on the complexity of the case and the risk element).

This system is accompanied by the After-the-Event Insurance policies which the parties take in order to cover the possible obligation to cover the costs of the other party (‘loser pays rule’).

The conditional fee system was introduced in England and Wales by the they were introduced by the Courts and Legal Services Act 1990 (section 58). Back then, the success fee could not be recovered from the losing party, but in April 2000 section 27 of the Access to Justice Act 1999 allowed such recovery. TheConditional Fee Agreements Regulations 2000 which accopanied this Act were however very ambiguous and led tosatellite litigation. They were revoked in 2005: at present the conditional fee agreements are more staightforward and relatively easier to enter into.

The CFA systems is still, however, very complex - also because CFAs are accompanied by the loser pays principle, and the resulting need to take an ATE (After-the-Event) Insurance Policy.

For further information see: the UK Bar Council Conditional Fee Guidance.