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21 February 2013

Rule change on CFA’s “no win no fee agreements”

Major changes in the rules relating to the recovery of legal fees in personal injury and clinical negligence claims are due to take effect on 1st April 2013.

The regulations are complicated and even at this late stage, are not entirely clear. However, the practical effect of these changes is that after 1st April 2013 clients on Conditional Fee  ("no win, no fee" ) Agreements  (CFAs) will no longer be entitled to recover all of their fees from their opponent and accordingly , will have to pay some of their legal fees from their compensation. This will be to a maximum of 25% of any compensation received, although some elements of the claim may be excluded from this calculation and therefore protected, this depending on the nature of the financial claims being made.

If you are considering making a claim, there may still be time  to avoid the effect of these changes, but you need to act now and consult us well in advance of the 1st April 2013, so that we can consider whether we are able to put into place the necessary contractual and insurance contracts to minimise the risk of you being affected by these changes.