Wigg & Co - conditional fee agreements statutory investment 2000

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See the Conditional Fee Agreement 2000 Statutory Instrument 2000 No. 692 which came into force from April 2000.

Section 58(1) of the Courts and Legal Services Act 1990 provides that a conditional fee agreement is not unenforceable if is satisfies certain conditions. These include conditions to be specified in regulations under section 58(3) of that Act.

Regulations 2 and 3 specify those conditions. Regulation 2 applies to all conditional fee agreements./p>

Regulation 3 sets out further requirements applying only to agreements which provide for success fees.

Section 58A(3) enables the conditions which may be prescribed for conditional fee agreements to include requirements for the person providing advocacy or litigation services to have provided prescribed information before the agreement is made.

Regulation 4 imposes such a requirement and specifies what information is to be given. It does not apply where the agreement is between legal representatives.

Regulation 5 requires that agreements other than those between legal representatives must be signed by the client and the legal representative. 

Regulation 6 provides for similar requirements to apply as respects amendments of agreements.  

These regulations replace the Conditional Fee Agreements Regulations 1995, which are revoked. 

CFA Risk Assessment

CPR does not define what a risk assessment should contain in order to be valid or require that the solicitor for the receiving party should ensure that a CFA detailed their rationale for assessing the risk of a particular matter. Regulation 3 (1)(a) of the Conditional Fee Agreements (CFA) Regulations 2000 (SI 2000 No 692) merely states that the CFA must briefly specify the reason for setting a percentage increase at the level stated in the agreement. On the face of it it would seem that a simple statement that "this matter had a limited chance of success" would suffice. CPR Rule 44.15 (1) and S32.7 of the Costs Practice Direction take matters no further. A statement of reasons must be served on the paying party as required by CPR Rule 44.3(b). Although the rule contains a provision that an additional liability shall not be recoverable where the statement of reasons has not been served S10.1 of the Practice Direction provides relief from sanction provided that the statement is served as quickly as possible after the solicitor becomes aware of the default and even if he fails to do this CPR Rule 3.9(1) comes to his rescue in some Courts who consider raising the failure to serve the statement of reasons as a technical challenge which is saved by the provisions of Rule 3.9 (1).

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