Conditional fee agreements (CFAs) which provide for a discounted fee rate in the event of defeat have survived their first major court challenge.


South-west firm Clarke Willmott acted for a claimant under a collective CFA which provided that the basic charge was £145 per hour, but that a rate of £95 per hour would be charged if the case were lost. The claim was successful, however, and Clarke Willmott sought a 100% success fee on £145.



The defendants argued that that the basic fee was really £95, and that only £50 per hour was 'at risk', meaning that to seek a success fee of £145 per hour amounted to an unlawful 290% uplift.



But the Court of Appeal last week rejected this argument in Gloucestershire County Council v Evans & ors [2008] EWCA Civ 21. Lord Justice Dyson said: 'It is clear that the lawfulness of the percentage increase is measured not by reference to the costs at risk, but by reference to the fees that would have been payable if the CFA were not a CFA. The concept of "costs at risk" cannot be extracted from the statute and cannot be invoked to place upon it a meaning that it cannot bear.'


Neil Rose