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Title: Baffled by solicitor forms received

Date: 07 January 2016

Q

What’s the difference between a conditional fee agreement and a contingency fee agreement – I am confused – my solicitors have sent me one of each to sign in relation to my diesel spill accident. I cannot get a clear answer from them, well at least not one that I understand. All sorts of different percentages are mentioned and I don’t know what I’m signing up to. Thank you in anticipation.

John Blacklaw, Staffs

A

These agreements should have been clearly explained to you during your first conversation with your solicitors as it is essential that a client entering into a legally binding contract in respect of legal fees, knows what he/she is getting into!

A conditional fee agreement is commonly known as a no-win, no-fee agreement. This means that if the claim fails you don’t have to pay your solicitor his costs. The solicitor will write them off. If the claim succeeds the solicitor will get paid his basic costs by the third party insurer but the success fee on those costs is payable by you out of your damages. Should legal expenses insurance be required to cover the risk of losing and having to pay disbursements / opponent’s costs this is also for the Claimant to pay. It may be that you have legal expenses insurance already and a careful check should be undertaken.

A contingency fee agreement is slightly different in that again it is no-win, no-fee (should the claim fail you pay nothing) but if the claim succeeds then you pay your solicitor a percentage of the compensation you receive. This is the common way that diesel spill and other untraced negligent road user cases are funded in England and Wales. This is because the compensating body, the MIB, only pays a small contribution towards legal costs.

I imagine that your solicitors have sent you one of each agreement type because they think that there may be an identifiable insured opponent (e.g. haulage company, highway authority etc) but that if not they will rely on the contingency fee agreement in the untraced driver claim.

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