A law firm has offered to take your claim on a no win no fee basis, and sent over a document called a conditional fee agreement to sign. You want to know what you are agreeing to before you put your name to it.
That instinct is right. The agreement decides how much of any compensation you keep, and the terms that matter most are not always the ones a firm draws your attention to.
What is a conditional fee agreement?
A conditional fee agreement, or CFA, is the formal name for most no win no fee deals. Under section 58 of the Courts and Legal Services Act 1990, it is an agreement where your solicitor charges their fee only if your claim succeeds. Lose, and you do not pay that fee. Win, and you pay it, usually with an extra amount on top called a success fee.
The law requires a CFA to be in writing. That matters for you: the percentage, the definition of a win, and every other term are all there in a document you can read and question before signing. If a firm has explained the deal only over the phone, ask for the written agreement.
Put simply, a CFA moves the risk of losing from you to the firm, and in exchange the firm takes more if you win. The rest of this guide is about what "more" means, and where it is written down.
How does a success fee work and when is it capped at 25%?
The success fee is the firm's reward for taking the risk. It is set as a percentage of the firm's own charges, meaning the base costs they would bill for their time, not your compensation and not their expenses. That percentage is capped at 100% of the firm's base costs under article 3 of the Conditional Fee Agreements Order 2013, so the success fee can at most double the firm's own bill.
Since April 2013 the losing side does not pay that success fee (section 44 of LASPO 2012). It comes out of your compensation instead, which is why the percentage is your problem and not only the firm's.
You will often see "25%" quoted, and this is where people get caught out. The 25% figure is a separate cap, and it applies to personal injury claims only. In an injury case the success fee taken from your damages cannot exceed 25% of two specific parts of your compensation: your general damages for the injury itself, and your past financial losses after any benefits the state claws back are taken off. Money for future losses is left out of that sum, and the cap applies at first instance, meaning before any appeal.
In a housing disrepair claim with no injury element, the only cap on what comes out of your compensation is the one written into your agreement. That condition matters. If your disrepair claim also includes a health element, such as illness from damp or mould, the injury part brings the 25% cap back for those heads. Where there is no injury, the deduction clause in your CFA is doing all the work, so if you are claiming against a landlord for disrepair compensation, read it first. Whatever percentage that clause names is what comes out of your award.
That does not leave you with nothing. If the bill looks unreasonable you can ask the court to assess it under section 70 of the Solicitors Act 1974, and CPR 46.9 presumes costs of an unusual amount to be unreasonable where the firm never warned you about them. It is a right to have the bill checked rather than a likely win, but it is there.
What is the difference between a CFA and a damages-based agreement?
A conditional fee agreement is one of two main no win no fee arrangements. The other is a damages-based agreement, or DBA, and the difference is in how the firm gets paid when you win.
| Conditional fee agreement | Damages-based agreement | |
|---|---|---|
| What you pay if you win | The firm's costs plus a success fee | A share of your compensation |
| What the fee is based on | The firm's own charges for the work | The money you recover |
| Cap on what comes out of your compensation | Whatever your agreement says, with the success fee capped at 100% of base costs | 50% of your compensation in a housing claim, including VAT |
Under the Damages-Based Agreements Regulations 2013, a DBA fee is capped at 25% of compensation in a personal injury claim and 50% in other civil claims, with a separate ceiling of 35% for employment matters. All three figures include VAT. CFAs are far more common for consumer and housing claims, but if your document is headed "damages-based agreement", the fee comes straight out of your award, so the percentage is the number to focus on.
The rules here may not stay still. The Civil Justice Council's Review of Litigation Funding, which reported on 2 June 2025, recommended replacing the CFA and DBA rules with a single regime. The government has not taken that step, so the caps above are what apply today.
What to check in a conditional fee agreement before signing
Before you sign, work through the document and find these terms. Each is a clause to look for, not a matter of trust.
- The success fee percentage, and what it is a percentage of. Confirm whether it is a share of the firm's costs or, in a DBA, a share of your compensation.
- The definition of a "win". This decides when the fee becomes payable. Check whether settling before a hearing counts.
- Who pays disbursements, and when. Disbursements are the out-of-pocket costs of running a claim, such as court fees and expert reports. Some agreements expect you to fund these as the case goes along.
- The termination clause, both ways. Look at what you owe if you end the agreement, and what happens if the firm drops your case.
- After-the-event insurance. Check whether a policy is included to cover the other side's costs if you lose, and who pays the premium.
- The cooling-off notice. A no win no fee agreement signed at home or at a distance usually carries a right to cancel within 14 days under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, and the paperwork should set it out.
If a clause is unclear, ask the firm to explain it in writing before you sign. A reputable firm will.
Signing a conditional fee agreement is easier when you know what each clause means for your money. Remedy can walk you through a no win no fee agreement before you commit, so you go in knowing what you would keep if your claim succeeds.
