This type of agreement is often referred to as a ‘no win, no fee’ agreement, which is somewhat misleading as it usually only covers your liability for your solicitor’s fees and not expenses or disbursements (such as Court fees, and barrister and expert fees) or your opponent’s fees and disbursements if you are unsuccessful.
A CFA is a private funding agreement where, in exchange for a solicitor agreeing that they will not seek recovery of some or all of their fees if a case is unsuccessful, you agree to pay the solicitor a “success fee” in addition to their normal fees if the case is successful. The success fee is calculated as a percentage of the normal fees and cannot be more than 100%. The success fee itself is not recoverable from your opponent.
It is important to note that if you are unsuccessful, then in addition to your own expenses and disbursements, plus any sums due to your solicitor under the CFA, you may have to pay some of the fees and disbursements incurred by your opponent.
CFAs can be terminated on certain grounds by you or your solicitor, and in these circumstances you may be charged fees.