58 Conditional fee agreements

(1) In this section “a conditional fee agreement” means an agreement in writing between a person providing advocacy or litigation services and his client which—
(a) does not relate to proceedings of a kind mentioned in subsection (10);
(b) provides for that person’s fees and expenses, or any part of them, to be payable only in specified circumstances;
(c) complies with such requirements (if any) as may be prescribed by the Lord Chancellor; and
(d) is not a contentious business agreement (as defined by section 59 of the [1974 c. 47.] Solicitors Act 1974).

(2) Where a conditional fee agreement provides for the amount of any fees to which it applies to be increased, in specified circumstances, above the amount which would be payable if it were not a conditional fee agreement, it shall specify the percentage by which that amount is to be increased.

(3) Subject to subsection (6), a conditional fee agreement which relates to specified proceedings shall not be unenforceable by reason only of its being a conditional fee agreement.

(4) In this section “specified proceedings” means proceedings of a description specified by order made by the Lord Chancellor for the purposes of subsection (3).

(5) Any such order shall prescribe the maximum permitted percentage for each description of specified proceedings.

(6) An agreement which falls within subsection (2) shall be unenforceable if, at the time when it is entered into, the percentage specified in the agreement exceeds the prescribed maximum permitted percentage for the description of proceedings to which it relates.

(7) Before making any order under this section the Lord Chancellor shall consult the designated judges, the General Council of the Bar, the Law Society and such other authorised bodies (if any) as he considers appropriate.

(8) Where a party to any proceedings has entered into a conditional fee agreement and a costs order is made in those proceedings in his favour, the costs payable to him shall not include any element which takes account of any percentage increase payable under the agreement.

(9) Rules of court may make provision with respect to the taxing of any costs which include fees payable under a conditional fee agreement.

(10) The proceedings mentioned in subsection (1)(a) are any criminal proceedings and any proceedings under—
(a) the [1973 c. 18.] Matrimonial Causes Act 1973;
(b) the [1976 c. 50.] Domestic Violence and [1984 c. 42.] Matrimonial Proceedings Act 1976;
(c) the [1976 c. 36.] Adoption Act 1976;
(d) the [1978 c. 22.] Domestic Proceedings and Magistrates' Courts Act 1978;
(e) sections 1 and 9 of the [1983 c. 19.] Matrimonial Homes Act 1983;
(f) Part III of the [1984 c. 42.] Matrimonial and Family Proceedings Act 1984;
(g) Parts I, II or IV of the [1989 c. 41.] Children Act 1989; or
(h) the inherent jurisdiction of the High Court in relation to children.

Other funding of legal services

Conditional fee and litigation funding agreements

27 Conditional fee agreements (1) For section 58 of the [1990 c. 41.] Courts and Legal Services Act 1990 substitute—
“58 Conditional fee agreements (1) A conditional fee agreement which satisfies all of the conditions applicable to it by virtue of this section shall not be unenforceable by reason only of its being a conditional fee agreement; but (subject to subsection (5)) any other conditional fee agreement shall be unenforceable.

(2) For the purposes of this section and section 58A—
(a) a conditional fee agreement is an agreement with a person providing advocacy or litigation services which provides for his fees and expenses, or any part of them, to be payable only in specified circumstances; and

(b) a conditional fee agreement provides for a success fee if it provides for the amount of any fees to which it applies to be increased, in specified circumstances, above the amount which would be payable if it were not payable only in specified circumstances.

(3) The following conditions are applicable to every conditional fee agreement—
(a) it must be in writing;
(b) it must not relate to proceedings which cannot be the subject of an enforceable conditional fee agreement; and
(c) it must comply with such requirements (if any) as may be prescribed by the Lord Chancellor.

(4) The following further conditions are applicable to a conditional fee agreement which provides for a success fee—
(a) it must relate to proceedings of a description specified by order made by the Lord Chancellor;
(b) it must state the percentage by which the amount of the fees which would be payable if it were not a conditional fee agreement is to be increased; and
(c) that percentage must not exceed the percentage specified in relation to the description of proceedings to which the agreement relates by order made by the Lord Chancellor.

(5) If a conditional fee agreement is an agreement to which section 57 of the [1974 c. 47.] Solicitors Act 1974 (non-contentious business agreements between solicitor and client) applies, subsection (1) shall not make it unenforceable.
58A Conditional fee agreements: supplementary (1) The proceedings which cannot be the subject of an enforceable conditional fee agreement are—
(a) criminal proceedings, apart from proceedings under section 82 of the [1990 c. 43.] Environmental Protection Act 1990; and
(b) family proceedings.
(2) In subsection (1) “family proceedings” means proceedings under any one or more of the following—
(a) the [1973 c. 18.] Matrimonial Causes Act 1973;
(b) the [1976 c. 36.] Adoption Act 1976;
(c) the [1978 c. 22.] Domestic Proceedings and Magistrates' Courts Act 1978;
(d) Part III of the [1984 c. 42.] Matrimonial and Family Proceedings Act 1984;
(e) Parts I, II and IV of the [1989 c. 41.] Children Act 1989;
(f) Part IV of the [1996 c. 27.] Family Law Act 1996; and
(g) the inherent jurisdiction of the High Court in relation to children.
(3) The requirements which the Lord Chancellor may prescribe under section 58(3)(c)—
(a) include requirements for the person providing advocacy or litigation services to have provided prescribed information before the agreement is made; and
(b) may be different for different descriptions of conditional fee agreements (and, in particular, may be different for those which provide for a success fee and those which do not).

(4) In section 58 and this section (and in the definitions of “advocacy services” and “litigation services” as they apply for their purposes) “proceedings” includes any sort of proceedings for resolving disputes (and not just proceedings in a court), whether commenced or contemplated.

(5) Before making an order under section 58(4), the Lord Chancellor shall consult—
(a) the designated judges;
(b) the General Council of the Bar;
(c) the Law Society; and
(d) such other bodies as he considers appropriate.

(6) A costs order made in any proceedings may, subject in the case of court proceedings to rules of court, include provision requiring the payment of any fees payable under a conditional fee agreement which provides for a success fee.

(7) Rules of court may make provision with respect to the assessment of any costs which include fees payable under a conditional fee agreement (including one which provides for a success fee).”
(2) In section 120(4) of the [1990 c. 41.] Courts and Legal Services Act 1990 (orders and regulations subject to affirmative procedure), for “58,” substitute “58(4),”.

28 Litigation funding agreements

In the Courts and Legal Services Act 1990, after section 58A (inserted by section 27 above) insert—
“58B Litigation funding agreements

(1) A litigation funding agreement which satisfies all of the conditions applicable to it by virtue of this section shall not be unenforceable by reason only of its being a litigation funding agreement.

(2) For the purposes of this section a litigation funding agreement is an agreement under which—
(a) a person (“the funder”) agrees to fund (in whole or in part) the provision of advocacy or litigation services (by someone other than the funder) to another person (“the litigant”); and
(b) the litigant agrees to pay a sum to the funder in specified circumstances.

(3) The following conditions are applicable to a litigation funding agreement—
(a) the funder must be a person, or person of a description, prescribed by the Lord Chancellor;
(b) the agreement must be in writing;
(c) the agreement must not relate to proceedings which by virtue of section 58A(1) and (2) cannot be the subject of an enforceable conditional fee agreement or to proceedings of any such description as may be prescribed by the Lord Chancellor;
(d) the agreement must comply with such requirements (if any) as may be so prescribed;
(e) the sum to be paid by the litigant must consist of any costs payable to him in respect of the proceedings to which the agreement relates together with an amount calculated by reference to the funder’s anticipated expenditure in funding the provision of the services; and
(f) that amount must not exceed such percentage of that anticipated expenditure as may be prescribed by the Lord Chancellor in relation to proceedings of the description to which the agreement relates.

(4) Regulations under subsection (3)(a) may require a person to be approved by the Lord Chancellor or by a prescribed person.

(5) The requirements which the Lord Chancellor may prescribe under subsection (3)(d)—
(a) include requirements for the funder to have provided prescribed information to the litigant before the agreement is made; and
(b) may be different for different descriptions of litigation funding agreements.

(6) In this section (and in the definitions of “advocacy services” and “litigation services” as they apply for its purposes) “proceedings” includes any sort of proceedings for resolving disputes (and not just proceedings in a court), whether commenced or contemplated.

(7) Before making regulations under this section, the Lord Chancellor shall consult—
(a) the designated judges;
(b) the General Council of the Bar;
(c) the Law Society; and
(d) such other bodies as he considers appropriate.

(8) A costs order made in any proceedings may, subject in the case of court proceedings to rules of court, include provision requiring the payment of any amount payable under a litigation funding agreement.

(9) Rules of court may make provision with respect to the assessment of any costs which include fees payable under a litigation funding agreement.”
Costs

29 Recovery of insurance premiums by way of costs

Where in any proceedings a costs order is made in favour of any party who has taken out an insurance policy against the risk of incurring a liability in those proceedings, the costs payable to him may, subject in the case of court proceedings to rules of court, include costs in respect of the premium of the policy.

30 Recovery where body undertakes to meet costs liabilities

(1) This section applies where a body of a prescribed description undertakes to meet (in accordance with arrangements satisfying prescribed conditions) liabilities which members of the body or other persons who are parties to proceedings may incur to pay the costs of other parties to the proceedings.

(2) If in any of the proceedings a costs order is made in favour of any of the members or other persons, the costs payable to him may, subject to subsection (3) and (in the case of court proceedings) to rules of court, include an additional amount in respect of any provision made by or on behalf of the body in connection with the proceedings against the risk of having to meet such liabilities.

(3) But the additional amount shall not exceed a sum determined in a prescribed manner; and there may, in particular, be prescribed as a manner of determination one which takes into account the likely cost to the member or other person of the premium of an insurance policy against the risk of incurring a liability to pay the costs of other parties to the proceedings.

(4) In this section “prescribed” means prescribed by regulations made by the Lord Chancellor by statutory instrument; and a statutory instrument containing such regulations shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(5) Regulations under subsection (1) may, in particular, prescribe as a description of body one which is for the time being approved by the Lord Chancellor or by a prescribed person.

31 Rules as to costs

In section 51 of the [1981 c. 54.] Supreme Court Act 1981 (costs), in subsection (2) (rules regulating matters relating to costs), insert at the end “or for securing that the amount awarded to a party in respect of the costs to be paid by him to such representatives is not limited to what would have been payable by him to them if he had not been awarded costs.”

1. Introduction

(a) This code replaces the written professional standards on costs information for clients (see paragraphs 3–6) and the detail previously contained in Practice Rule 15 (client care) (see paragraph 7).

(b) The main object of the code is to make sure that clients are given the information they need to understand what is happening generally and in particular on:
(i) the cost of legal services both at the outset and as a matter progresses; and
(ii) responsibility for clients' matters.

(c) The code also requires firms to operate a complaints handling procedure.

(d) It is good practice to record in writing:
(i) all information required to be given by the code including all decisions relating to costs and the arrangements for updating costs information; and
(ii) the reasons why the information required by the code has not been given in a particular case.

(e) References to costs, where appropriate, include fees, VAT and disbursements.

2. Application

(a) The code is of general application, and it applies to registered foreign lawyers as well as to solicitors of the Supreme Court and registered European lawyers (subject to note (v) to Practice Rule 15). However, as set out in paragraph 2
(b), parts of the code may not be appropriate in every case, and solicitors should consider the interests of each client in deciding which parts not to apply in the particular circumstances.

(b) The full information required by the code may be inappropriate, for example:
(i) in every case, for a regular client for whom repetitive work is done, where the client has already been provided with the relevant information, although such a client should be informed of changes; and(ii) if compliance with the code may at the time be insensitive or impractical. In such a case relevant information should be given as soon as reasonably practicable.

(c) Employed solicitors should have regard to paragraphs 3–6A of the code where appropriate, e.g. when acting for clients other than their employer. Paragraph 7 does not apply to employed solicitors.

(d) Solicitors should comply with paragraphs 3–6 of the code even where a client is legally aided if the client may have a financial interest in the costs because contributions are payable or the statutory charge may apply or they may become liable for the costs of another party.
(da) If appropriate solicitors should also comply with paragraph 6A of the code where a client is legally aided.

(e) The code also applies to contingency fee and conditional fee arrangements and to arrangements with a client for the solicitor to retain commissions received from third parties.

3. Informing the client about costs

(a) Costs information must not be inaccurate or misleading.

(b) Any costs information required to be given by the code must be given clearly, in a way and at a level which is appropriate to the particular client. Any terms with which the client may be unfamiliar, for example "disbursement", should be explained.

(c) The information required by paragraphs 4 and 5 of the code should be given to a client at the outset of, and at appropriate stages throughout, the matter. All information given orally should be confirmed in writing to the client as soon as possible.

4. Advance costs information – general

The overall costs

(a) The solicitor should give the client the best information possible about the likely overall costs, including a breakdown between fees, VAT and disbursements.

(b) The solicitor should explain clearly to the client the time likely to be spent in dealing with a matter, if time spent is a factor in the calculation of the fees.

(c) Giving "the best information possible" includes:
(i) agreeing a fixed fee; or
(ii) giving a realistic estimate; or
(iii) giving a forecast within a possible range of costs; or
(iv) explaining to the client the reasons why it is not possible to fix, or give a realistic estimate or forecast of, the overall costs, and giving instead the best information possible about the cost of the next stage of the matter.

(d) The solicitor should, in an appropriate case, explain to a privately paying client that the client may set an upper limit on the firm's costs for which the client may be liable without further authority. Solicitors should not exceed an agreed limit without first obtaining the client's consent.

(e) The solicitor should make it clear at the outset if an estimate, quotation or other indication of cost is not intended to be fixed.

Basis of firm's charges

(f) The solicitor should also explain to the client how the firm's fees are calculated except where the overall costs are fixed or clear. If the basis of charging is an hourly charging rate, that must be made clear.

(g) The client should be told if charging rates may be increased.
Further information

(h) The solicitor should explain what reasonably foreseeable payments a client may have to make either to the solicitor or to a third party and when those payments are likely to be needed.

(i) The solicitor should explain to the client the arrangements for updating the costs information as set out in paragraph 6.

Client's ability to pay

(j) The solicitor should discuss with the client how and when any costs are to be met, and consider:-
(i) whether the client may be eligible and should apply for legal aid (including advice and assistance);
(ii) whether the client's liability for their own costs may be covered by insurance;
(iii) whether the client's liability for another party’s costs may be covered by pre-purchased insurance and, if not, whether it would be advisable for the client’s liability for another party’s costs to be covered by after the event insurance (including in every case where a conditional fee or contingency fee arrangement is proposed); and
(iv) whether the client’s liability for costs (including the costs of another party) may be paid by another person e.g. an employer or trade union.

Cost-benefit and risk

(k) The solicitor should discuss with the client whether the likely outcome in a matter will justify the expense or risk involved including, if relevant, the risk of having to bear an opponent's costs.

5. Additional information for particular clients

Legally aided clients

(a) The solicitor should explain to a legally aided client the client's potential liability for the client's own costs and those of any other party, including:
(i) the effect of the statutory charge and its likely amount;
(ii) the client's obligation to pay any contribution assessed and the consequences of failing to do so;
(iii) the fact that the client may still be ordered by the court to contribute to the opponent's costs if the case is lost even though the client's own costs are covered by legal aid; and
(iv) the fact that even if the client wins, the opponent may not be ordered to pay or be capable of paying the full amount of the client's costs.

Privately paying clients in contentious matters (and potentially contentious matters)

(b) The solicitor should explain to the client the client's potential liability for the client's own costs and for those of any other party, including:
(i) the fact that the client will be responsible for paying the firm's bill in full regardless of any order for costs made against an opponent;
(ii) the probability that the client will have to pay the opponent's costs as well as the client's own costs if the case is lost;
(iii) the fact that even if the client wins, the opponent may not be ordered to pay or be capable of paying the full amount of the client's costs; and
(iv) the fact that if the opponent is legally aided the client may not recover costs, even if successful.
Liability for third party costs in non-contentious matters

(c) The solicitor should explain to the client any liability the client may have for the payment of the costs of a third party. When appropriate, solicitors are advised to obtain a firm figure for or agree a cap to a third party's costs.

Clients represented under a conditional fee agreement (including a collective conditional fee agreement)
(d) Where a client is represented under a conditional fee agreement, the solicitor should explain:
(i) the circumstances in which the client may be liable for their own costs and for the other party’s costs;
(ii) the client’s right to assessment of costs, wherever the solicitor intends to seek payment of any or all of their costs from the client;
(iii) any interest the solicitor may have in recommending a particular policy or other funding; and
(iv) where applicable, the fact that the solicitor is obliged under a fee sharing agreement to pay to a charity any fees which the solicitor receives by way of costs from the client’s opponent or other third party.

Charitable fee sharing

(e) Wherever a solicitor agrees to share his or her fees with a charity in accordance with Practice Rule 7(1)(e) or (3)(b), the solicitor must disclose to the client the name of the charity.

6. Updating costs information

The solicitor should keep the client properly informed about costs as a matter progresses. In particular, the solicitor should:
(a) tell the client, unless otherwise agreed, how much the costs are at regular intervals (at least every six months) and in appropriate cases deliver interim bills at agreed intervals;
(b) explain to the client (and confirm in writing) any changed circumstances which will, or which are likely to affect the amount of costs, the degree of risk involved, or the cost-benefit to the client of continuing with the matter;
(c) inform the client in writing as soon as it appears that a costs estimate or agreed upper limit may or will be exceeded; and
(d) consider the client's eligibility for legal aid if a material change in the client's means comes to the solicitor's attention.

6A. Disclosure of solicitor’s arrangements with third parties

(a) The solicitor should disclose to the client any relationship with a third party (for example a funder, fee sharer or introducer) which affects the steps which the solicitor can take on the client’s behalf.

(b) The solicitor should explain any constraints or conditions which affect the client.
All information given orally concerning (a) and (b) above should be confirmed in writing to the client as soon as possible.

7. Client care and complaints handling
Information for clients

(a) Every solicitor in private practice must ensure that the client:
(i) is given a clear explanation of the issues raised in a matter and is kept properly informed about its progress (including the likely timescale);

(ii) is given the name and status of the person dealing with the matter and the name of the principal, or director (in the case of a recognised body which is a company), or member (in the case of a recognised body which is a limited liability partnership) responsible for its overall supervision;

(iii) is told whom to contact about any problem with the service provided; and

(iv) is given details of any changes in the information required to be given by this paragraph.
Complaints handling

(b) Every principal in private practice (or, in the case of a recognised body, the body itself) must:

(i) ensure the client is told the name of the person in the firm to contact about any problem with the service provided;
(ii) have a written complaints procedure and ensure that complaints are handled in accordance with it; and
(iii) ensure that the client is given a copy of the complaints procedure on request.

Statutory Instrument 2000 No. 2988

LEGAL SERVICES, ENGLAND AND WALES

The Collective Conditional Fee Agreements Regulations 2000

Made 7th November 2000
Laid before Parliament 8th November 2000
Coming into force 30th November 2000

The Lord Chancellor, in exercise of the powers conferred upon him by sections 58(3)(c), 58A(3) and
119 of the Courts and Legal Services Act 1990[1] hereby makes the following Regulations:

Citation, commencement and interpretation

1. - (1) These regulations may be cited as the Collective Conditional Fee Agreements Regulations 2000, and shall come into force on 30th November 2000.

(2) In these Regulations, except where the context requires otherwise - "client" means a person who will receive advocacy or litigation services to which the agreement
relates; "collective conditional fee agreement" has the meaning given in regulation 3;
"conditional fee agreement" has the same meaning as in section 58 of the Courts and Legal
Services Act 1990;
"funder" means the party to a collective conditional fee agreement who, under that agreement, is
liable to pay the legal representative's fees;
"legal representative" means the person providing the advocacy or litigation services to which the
agreement relates.

Transitional provisions

2. These Regulations shall apply to agreements entered into on or after 30th November 2000, and
agreements entered into before that date shall be treated as if these Regulations had not come into
force.

Definition of "collective conditional fee agreement"

3. - (1) Subject to paragraph (2) of this regulation, a collective conditional fee agreement is an
agreement which -
(a) disregarding section 58(3)(c) of the Courts and Legal Services Act 1990, would be a
conditional fee agreement; and
(b) does not refer to specific proceedings, but provides for fees to be payable on a common basis
in relation to a class of proceedings, or, if it refers to more than one class of proceedings, on a
common basis in relation to each class.
(2) An agreement may be a collective conditional fee agreement whether or not -
(a) the funder is a client; or
(b) any clients are named in the agreement.
Requirements for contents of collective conditional fee agreements: general

4. - (1) A collective conditional fee agreement must specify the circumstances in which the legal
representative's fees and expenses, or part of them, are payable.
(2) A collective conditional fee agreement must provide that, when accepting instructions in relation to
any specific proceedings the legal representative must -
(a) inform the client as to the circumstances in which the client may be liable to pay the costs of
the legal representative; and
(b) if the client requires any further explanation, advice or other information about the matter
referred to in sub-paragraph (a), provide such further explanation, advice or other information
about it as the client may reasonably require.
(3) Paragraph (2) does not apply in the case of an agreement between a legal representative and an
additional legal representative.
(4) A collective conditional fee agreement must provide that, after accepting instructions in relation to
any specific proceedings, the legal representative must confirm his acceptance of instructions in writing
to the client.
Requirements for contents of collective conditional fee agreements providing for success fees

5. - (1) Where a collective conditional fee agreement provides for a success fee the agreement must
provide that, when accepting instructions in relation to any specific proceedings the legal representative
must prepare and retain a written statement containing -
(a) his assessment of the probability of the circumstances arising in which the percentage increase
will become payable in relation to those proceedings ("the risk assessment");
(b) his assessment of the amount of the percentage increase in relation to those proceedings,
having regard to the risk assessment; and
(c) the reasons, by reference to the risk assessment, for setting the percentage increase at that
level.
(2) If the agreement relates to court proceedings it must provide that where the success fee becomes
payable as a result of those proceedings, then -
(a) if -
(i) any fees subject to the increase are assessed, and
(ii) the legal representative or the client is required by the court to disclose to the
court or any other person the reasons for setting the percentage increase at the
level assessed by the legal representative,
he may do so,
(b) if -
(i) any such fees are assessed by the court, and
(ii) any amount in respect of the percentage increase is disallowed on the assessment
on the ground that the level at which the increase was set was unreasonable in
view of facts which were or should have been known to the legal representative
at the time it was set
that amount ceases to be payable under the agreement, unless the court is satisfied that it
should continue to be so payable, and
(c) if -
(i) sub-paragraph (b) does not apply, and
(ii) the legal representative agrees with any person liable as a result of the
proceedings to pay fees subject to the percentage increase that a lower amount
than the amount payable in accordance with the conditional fee agreement is to
be paid instead,
the amount payable under the collective conditional fee agreement in respect of those fees
shall be reduced accordingly, unless the court is satisfied that the full amount should
continue to be payable under it.
(3) In this regulation "percentage increase" means the percentage by which the amount of the fees
which would have been payable if the agreement were not a conditional fee agreement is to be
increased under the agreement.

Form and amendment of collective conditional fee agreement

6. - (1) Subject to paragraph (2), a collective conditional fee agreement must be signed by the funder,
and by the legal representative.
(2) Paragraph (1) does not apply in the case of an agreement between a legal representative and an
additional legal representative.
(3) Where a collective conditional fee agreement is amended, regulations 4 and 5 apply to the amended
agreement as if it were a fresh agreement made at the time of the amendment.
Amendment to the Conditional Fee Agreements Regulations 2000

7. After regulation 7 of the Conditional Fee Agreements Regulations 2000[2] there shall be inserted the
following new regulation: -

" Exclusion of collective conditional fee agreements

8. These Regulations shall not apply to collective conditional fee agreements within the meaning
of regulation 3 of the Collective Conditional Fee Agreements Regulations 2000.".

Irvine of Lairg, C.

Dated 7th November 2000

EXPLANATORY NOTE
(This note is not part of the Regulations)
These regulations prescribe conditions which must be satisfied by a collective conditional fee
agreement.
A collective conditional fee agreement is a conditional fee agreement with a legal representative which
does not refer to specific proceedings, but provides for fees to be payable on a common basis in
relation to a class of proceedings, whether or not the person liable to pay the fees under the agreement
is the client of the legal representative.

Notes:

[1] 1990 c.41. Sections 58 and 58A are substituted by section 27 of the Access to Justice Act 1999
(c.22); section 119 is an interpretation provision and is cited because of the meaning given to the word
"prescribed".
[2] S.I. 2000/692

Statutory Instrument 2000 No. 692
LEGAL SERVICES, ENGLAND AND WALES
The Conditional Fee Agreements Regulations 2000
Made 9th March 2000
Laid before Parliament 10th March 2000
Coming into force 1st April 2000
The Lord Chancellor, in exercise of the powers conferred on him by sections 58(3)(c), 58A(3) and 119
of the Courts and Legal Services Act 1990[1] and all other powers enabling him hereby makes the
following Regulations:
Citation, commencement and interpretation
1. - (1) These Regulations may be cited as the Conditional Fee Agreements Regulations 2000.
(2) These Regulations come into force on 1st April 2000.
(3) In these Regulations -
"client" includes, except where the context otherwise requires, a person who -
(a) has instructed the legal representative to provide the advocacy or litigation services to
which the conditional fee agreement relates, or
(b) is liable to pay the legal representative's fees in respect of those services; and
"legal representative" means the person providing the advocacy or litigation services to which the
conditional fee agreement relates.
Requirements for contents of conditional fee agreements: general
2. - (1) A conditional fee agreement must specify -
(a) the particular proceedings or parts of them to which it relates (including whether it relates to
any appeal, counterclaim or proceedings to enforce a judgement or order),
(b) the circumstances in which the legal representative's fees and expenses, or part of them, are
payable,
(c) what payment, if any, is due -
(i) if those circumstances only partly occur,
(ii) irrespective of whether those circumstances occur, and
(iii) on the termination of the agreement for any reason, and
(d) the amounts which are payable in all the circumstances and cases specified or the method
to be used to calculate them and, in particular, whether the amounts are limited by reference to
the damages which may be recovered on behalf of the client.
(2) A conditional fee agreement to which regulation 4 applies must contain a statement that the
requirements of that regulation which apply in the case of that agreement have been complied with.
Requirements for contents of conditional fee agreements providing for success fees
3. - (1) A conditional fee agreement which provides for a success fee -
(a) must briefly specify the reasons for setting the percentage increase at the level stated in the
agreement, and
(b) must specify how much of the percentage increase, if any, relates to the cost to the legal
representative of the postponement of the payment of his fees and expenses.
(2) If the agreement relates to court proceedings, it must provide that where the percentage increase
becomes payable as a result of those proceedings, then -
(a) if -
(i) any fees subject to the increase are assessed, and
(ii) the legal representative or the client is required by the court to disclose to the court or
any other person the reasons for setting the percentage increase at the level stated in the
agreement,
he may do so,
(b) if -
(i) any such fees are assessed, and
(ii) any amount in respect of the percentage increase is disallowed on the assessment on
the ground that the level at which the increase was set was unreasonable in view of facts
which were or should have been known to the legal representative at the time it was set,
that amount ceases to be payable under the agreement, unless the court is satisfied that it
should continue to be so payable, and
(c) if -
(i) sub-paragraph (b) does not apply, and
(ii) the legal representative agrees with any person liable as a result of the proceedings to
pay fees subject to the percentage increase that a lower amount than the amount payable
in accordance with the conditional fee agreement is to be paid instead,
the amount payable under the conditional fee agreement in respect of those fees shall be
reduced accordingly, unless the court is satisfied that the full amount should continue to be
payable under it.
(3) In this regulation "percentage increase" means the percentage by which the amount of the fees
which would be payable if the agreement were not a conditional fee agreement is to be increased under
the agreement.
Information to be given before conditional fee agreements made
4. - (1) Before a conditional fee agreement is made the legal representative must -
(a) inform the client about the following matters, and
(b) if the client requires any further explanation, advice or other information about any of those
matters, provide such further explanation, advice or other information about them as the client may
reasonably require.
(2) Those matters are -
(a) the circumstances in which the client may be liable to pay the costs of the legal representative
in accordance with the agreement,
(b) the circumstances in which the client may seek assessment of the fees and expenses of the
legal representative and the procedure for doing so,
(c) whether the legal representative considers that the client's risk of incurring liability for costs in
respect of the proceedings to which agreement relates is insured against under an existing
contract of insurance,
(d) whether other methods of financing those costs are available, and, if so, how they apply to the
client and the proceedings in question,
(e) whether the legal representative considers that any particular method or methods of financing
any or all of those costs is appropriate and, if he considers that a contract of insurance is
appropriate or recommends a particular such contract -
(i) his reasons for doing so, and
(ii) whether he has an interest in doing so.
(3) Before a conditional fee agreement is made the legal representative must explain its effect to the
client.
(4) In the case of an agreement where -
(a) the legal representative is a body to which section 30 of the Access to Justice Act 1999[2]
(recovery where body undertakes to meet costs liabilities) applies, and
(b) there are no circumstances in which the client may be liable to pay any costs in respect of the
proceedings,
paragraph (1) does not apply.
(5) Information required to be given under paragraph (1) about the matters in paragraph (2)(a) to (d)
must be given orally (whether or not it is also given in writing), but information required to be so given
about the matters in paragraph (2)(e) and the explanation required by paragraph (3) must be given both
orally and in writing.
(6) This regulation does not apply in the case of an agreement between a legal representative and an
additional legal representative.
Form of agreement
5. - (1) A conditional fee agreement must be signed by the client and the legal representative.
(2) This regulation does not apply in the case of an agreement between a legal representative and an
additional legal representative.
Amendment of agreement
6. Where an agreement is amended to cover further proceedings or parts of them -
(a) regulations 2, 3 and 5 apply to the amended agreement as if it were a fresh agreement made at
the time of the amendment, and
(b) the obligations under regulation 4 apply in relation to the amendments in so far as they affect
the matters mentioned in that regulation.
Revocation of 1995 Regulations
7. The Conditional Fee Agreements Regulations 1995[3] are revoked.
Irvine of Lairg, C
9th March 2000
EXPLANATORY NOTE
(This note is not part of the Regulations)
Section 58(1) of the Courts and Legal Services Act 1990 provides that a conditional fee agreement is
not unenforceable if it 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. 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.
Notes:
[1] 1990 c. 41; sections 58 and 58A are substituted by section 27 of the Access to Justice Act 1999 (c.
22); section 119 is an interpretation provision and is cited because of the meaning given to the word
"prescribed".
[2] 1999 c. 22

Statutory Instruments 2000 No. 693
LEGAL SERVICES, ENGLAND AND WALES
The Access to Justice (Membership Organisations) Regulations 2000
Made 9th March 2000
Laid before Parliament 10th March 2000
Coming into force 1st April 2000
The Lord Chancellor, in exercise of the powers conferred on him by section 30(1) and (3) to (5) of the
Access to Justice Act 1999[1] and all other powers enabling him hereby makes the following
Regulations:
Citation, commencement and interpretation
1. (1) These Regulations may be cited as the Access to Justice (Membership Organisations)
Regulations 2000.
(2) These Regulations come into force on 1st April 2000.
Bodies of a prescribed description
2. The bodies which are prescribed for the purpose of section 30 of the Access to Justice Act 1999
(recovery where body undertakes to meet costs liabilities) are those bodies which are for the time being
approved by the Lord Chancellor for that purpose.
Requirements for arrangements to meet costs liabilities
3- (1) Section 30(1) of the Access to Justice Act 1999 applies to arrangements which satisfy the
following conditions.
(2) The arrangements must be in writing.
(3) The arrangements must contain a statement specifying -
(a) the circumstances in which the member or other party may be liable to pay costs of the
proceedings,
(b) whether such a liability arises -
(i) if those circumstances only partly occur,
(i) irrespective of whether those circumstances occur, and
(ii) on the termination of the arrangements for any reason,
(c) the basis on which the amount of the liability is calculated, and
(d) (d) the procedure for seeking assessment of costs.
(4) A copy of the part of the arrangements containing the statement must be given to the member or
other party to the proceedings whose liabilities the body is undertaking to meet as soon as possible after
the undertaking is given.
Recovery of additional amount for insurance costs
4. - (1) Where an additional amount is included in costs by virtue of section 30(2) of the Access to
Justice Act 1999 (costs payable to a member of a body or other person party to the proceedings to
include an additional amount in respect of provision made by the body against the risk of having to
meet the member's or other person's liabilities to pay other parties' costs), that additional amount must
not exceed the following sum.
(2) That sum is the likely cost to the member of the body or, as the case may be, the other person who
is a party to the proceedings in which the costs order is made of the premium of an insurance policy
against the risk of incurring a liability to pay the costs of other parties to the proceedings.
Irvine of Lairg, C
9th March 2000
EXPLANATORY NOTE
(This note is not part of the Regulations)
Section 30 of the Access to Justice Act 1999 applies where a body of a description to be specified in
regulations undertakes (in accordance with arrangements satisfying conditions to be so specified) to
meet liabilities which members of the body or other persons who are parties to proceedings may incur
to pay the costs of other parties. Regulation 2 of these Regulations specifies bodies which are for the
time being approved by the Lord Chancellor for this purpose. Regulation 3 specifies the conditions
which the arrangements must satisfy.
Under section 30(2) of that Act an additional amount may be included in costs payable to a member of
such a body or other person to cover insurance or other provision made by the body against the risk of
having to meet those liabilities of the member or other person. Under section 30(3) of that Act that
additional amount must not exceed a sum determined in a way specified by regulations. Regulation 4 of
these Regulations specifies that sum as the likely cost to the member or other person of the premium of
an insurance policy against the risk in question.
Notes:[1] 1999 c. 22

2003 No. 1240
LEGAL SERVICES, ENGLAND AND WALES
The Conditional Fee Agreements (Miscellaneous Amendments) Regulations 2003
Made 30th April 2003
Laid before Parliament 9th May 2003
Coming into force 2nd June 2003
The Lord Chancellor, in exercise of the powers conferred upon him by sections 58(3)(c), 58A(3) and
119 of the Courts and Legal Services Act 1990[1], makes the following Regulations:
Citation and commencement
1. These Regulations may be cited as the Conditional Fee Agreements (Miscellaneous Amendments)
Regulations 2003 and shall come into force on 2nd June 2003.
Amendments to the Conditional Fee Agreements Regulations 2000
2. - (1) The Conditional Fee Agreements Regulations 2000[2] are amended in accordance with this
regulation.
(2) After regulation 3, insert -
" Requirements where the client's liability is limited to sums recovered
3 - (1) This regulation applies to a conditional fee agreement under which, except in the
circumstances set out in paragraph (5), the client is liable to pay his legal representative's fees and
expenses only to the extent that sums are recovered in respect of the relevant proceedings, whether
by way of costs or otherwise.
(2) In determining for the purposes of paragraph (1) the circumstances in which a client is liable to
pay his legal representative's fees and expenses, no account is to be taken of any obligation to pay
costs in respect of the premium of a policy taken out to insure against the risk of incurring a
liability in the relevant proceedings.
(3) Regulations 2, 3 and 4 do not apply to a conditional fee agreement to which this regulation
applies.
(4) A conditional fee agreement to which this regulation applies must -
(a) specify -
(i) the particular proceedings or parts of them to which it relates (including
whether it relates to any appeal, counterclaim or proceedings to enforce a
judgment or order); and
(ii) the circumstances in which the legal representative's fees and expenses, or
part of them, are payable; and
(b) if it provides for a success fee -
(i) briefly specify the reasons for setting the percentage increase at the level
stated in the agreement; and
(ii) provide that if, in court proceedings, the percentage increase becomes
payable as a result of those proceedings and the legal representative or the client
is ordered to disclose to the court or any other person the reasons for setting the
percentage increase at the level stated in the agreement, he may do so.
(5) A conditional fee agreement to which this regulation applies may specify that the client
will be liable to pay the legal representative's fees and expenses whether or not sums are
recovered in respect of the relevant proceedings, if the client -
(a) fails to co-operate with the legal representative;
(b) fails to attend any medical or expert examination or court hearing which the legal
representative reasonably requests him to attend;
(c) fails to give necessary instructions to the legal representative; or
(d) withdraws instructions from the legal representative.
(6) Before a conditional fee agreement to which this regulation applies is made, the legal
representative must inform the client as to the circumstances in which the client may be liable
to pay the legal representative's fees and expenses, and provide such further explanation,
advice or other information as to those circumstances as the client may reasonably require.".
(3) In regulation 6(a), after "3", insert ", 3A".
Amendments to the Collective Conditional Fee Agreements Regulations 2000
3. - (1) The Collective Conditional Fee Agreements Regulations 2000[3] are amended in accordance
with this regulation.
(2) In regulation 4, after paragraph (1), insert -
" (1A) The circumstances referred to in paragraph (1) may include the fact that the legal
representative's fees and expenses are payable only to the extent that sums are recovered in respect
of the proceedings, whether by way of costs or otherwise.".
(3) After regulation 5(3), insert -
" (4) Sub-paragraphs (b) and (c) of paragraph (2) do not apply to a collective conditional fee
agreement under which, except in the circumstances set out in paragraph (6), the client is liable to
pay his legal representative's fees and expenses only to the extent that sums are recovered in
respect of the proceedings, whether by way of costs or otherwise.
(5) In determining for the purposes of paragraph (4) the circumstances in which a client is liable to
pay his legal representative's fees and expenses, no account is to be taken of any obligation to pay
costs in respect of the premium of a policy taken out to insure against the risk of incurring a
liability in the relevant proceedings.
(6) A collective conditional fee agreement to which paragraph (4) applies may specify that the
client will be liable to pay his legal representative's fees and expenses whether or not sums are
recovered in respect of the relevant proceedings, if the client -
(a) fails to co-operate with the legal representative;
(b) fails to attend any medical or expert examination or court hearing which the legal
representative reasonably requests him to attend;
(c) fails to give necessary instructions to the legal representative; or
(d) withdraws instructions from the legal representative.".
Irvine of Lairg,
C.
Dated 30th April 2003
EXPLANATORY NOTE
(This note is not part of the Regulations)
Section 58(1) of the Courts and Legal Services Act 1990 provides that a conditional fee agreement is
not unenforceable if it satisfies the conditions applicable by and under that section, which include
conditions specified in Regulations made by the Lord Chancellor under section 58(3)(c). These
Regulations make amendments to the Conditional Fee Agreements Regulations 2000 and the
Collective Conditional Fee Agreements Regulations 2000 to provide that a conditional fee agreement
will be enforceable even though the client is liable to pay his legal representative's fees and expenses
only if and to the extent that he recovers damages or costs in the proceedings. Amendments made to the
Civil Procedure Rules 1998 provide that costs payable under such a conditional fee agreement are
recoverable under Parts 44 to 48 of those Rules.
This in effect abrogates in relation to this type of conditional fee agreement the so-called indemnity
principle - the principle that the amount which can be awarded to a party in respect of costs to be paid
by him to his legal representatives is limited to what would have been payable by him to them if he had
not been awarded costs. Solicitors will to this extent be able to agree lawfully with their clients not to
seek to recover by way of costs anything in excess of what the court awards, or what it is agreed will be
paid, and will no longer be prevented from openly contracting with their clients on such terms.
Notes:
[1] 1990 c. 41. Sections 58 and 58A were substituted by section 27 of the Access to Justice Act 1999
(c. 22); section 119 is an interpretation provision and is cited because of the meaning given to the word
"prescribed".
[2] S.I. 2000/692 amended by S.I. 2000/2988.
[3] S.I. 2000/2988.
ISBN 0 11 046027 8

2005 No. 2305


LEGAL SERVICES, ENGLAND AND WALES


The Conditional Fee Agreements (Revocation) Regulations 2005

Made 9th August 2005
Laid before Parliament 19th August 2005
Coming into force 1st November 2005

The Secretary of State, in exercise of the powers conferred upon the Lord Chancellor by sections 58(3)(c), 58A(3), 119 and 120(3) of the Courts and Legal Services Act 1990[1] and now vested in him[2] makes the following Regulations:

Citation and commencement

1. These Regulations may be cited as the Conditional Fee Agreements (Revocation) Regulations 2005 and shall come into force on 1st November 2005.

Revocation

2. Subject to regulation 3, the Conditional Fee Agreements Regulations 2000[3] (the "CFA Regulations"), the Collective Conditional Fee Agreements Regulations 2000[4] (the "CCFA Regulations"), the Conditional Fee Agreements (Miscellaneous Amendments) Regulations 2003[5], and the Conditional Fee Agreements (Miscellaneous Amendments) (No. 2) Regulations 2003[6] are revoked.

Savings and transitional provisions

3. —(1) The CFA Regulations shall continue to have effect for the purposes of a conditional fee agreement entered into before 1st November 2005.

(2) Paragraph (1) shall apply in relation to a collective conditional fee agreement as if there were substituted for a reference to the CFA Regulations a reference to the CCFA Regulations.



Signed


Catherine. M. Ashton
Parliamentary Under Secretary of State Department for Constitutional Affairs

Date 9th August 2005



--------------------------------------------------------------------------------

EXPLANATORY NOTE

(This note is not part of the Regulations)


These Regulations revoke the Conditional Fee Agreements Regulations 2000 (S.I. 2000/692), the Collective Conditional Fee Agreements Regulations 2000 (S.I. 2000/2988), the Conditional Fee Agreements (Miscellaneous Amendments) Regulations 2003 (S.I.2003/1240) and the Conditional Fee Agreements (Miscellaneous Amendments) (No. 2) Regulations 2003 (S.I. 2003/3344) in respect of conditional fee agreements and collective conditional fee agreements entered into on or after 1st November 2005.

Parties may enter into Conditional Fee Agreements and Collective Conditional Fee Agreements on or after that date based on the primary legislation.


--------------------------------------------------------------------------------
Notes:

[1] 1990 c.41. Section 58 was substituted and section 58A inserted by the Access to Justice Act 1999 (c.22), section 27. Section 119 is cited because of the definition of "prescribed".back
[2] Article 4, Schedule 1 and paragraph 8(1)(c) of Schedule 2 of the Secretary of State for Constitutional Affairs Order 2003 (S.I. 2003/1887).back

[3] S.I. 2000/692.back

[4] S.I. 2000/2988.back

[5] S.I. 2003/1240.back

[6] .I. 2003/3344.back

Rule dated [the date of notification of the Lord Chancellor’s approval] made by the Council of the Law Society under part II of the Solicitors Act 1974 and section 9 of the Administration of Justice Act 1985, with the concurrence of the Master of the Rolls under that section and the approval of the Lord Chancellor under Schedule 4 to the Courts and Legal services Act 1990, regulating the conduct of solicitors, registered European lawyers, registered foreign lawyers and recognised bodies.

(1) At the end of paragraph 5 of the Solicitors’ Costs Information and Client Care Code 1999 add:
“Clients represented under a conditional fee agreement (including a collective conditional fee agreement)
(d) Where a client is represented under a conditional fee agreement, the solicitor should explain:
(i) the circumstances in which the client may be liable for their own costs and for the other party’s costs;(ii) the client’s right to assessment of costs, wherever the solicitor intends to seek payment of any or all of their costs from the client; and
(iii) any interest the solicitor may have in recommending a particular policy or other funding.

(2) This rule will come into force on [the date of notification of the Lord Chancellor’s approval or the date of repeal of the Conditional Fee Agreements Regulations (2000), whichever is the later].”