A Collective Conditional Fee Agreement is the same as a CFA but is used for class actions (where there are many individuals pursuing the same claim) or for different types of legal claim. They assist in establishing consistency for the solicitor’s fees and protection for all new claimants or actions.
A Conditional Fee Agreement is an agreement, generally between the client and his/her solicitor, such that the solicitor’s legal fees will only be payable in certain circumstances. Full details of Conditional Fee Agreements can be found here.
Collective Conditional Fee Agreements were brought into force with the Collective Conditional Fee Agreements Regulations 2000, which commenced from 30 November 2000. They provide for the use of a Conditional Agreement in a more commercial context and where a litigation funder (be that a lender or any other type of financier) are a party to the agreement. More information about 3rd party funding can be found here.
Generally, a Collective Conditional Fee Agreement can be used for class actions, where there is more than one type of client pursuing a remedy via a claim brought by a number of individual parties, or where there is an ongoing Collective Conditional Fee Agreement governing more than one set of proceedings.
However, a Collective Conditional Fee Agreement may work in a slightly different way as to a conventional Conditional Fee Agreement entered into between a solicitor and his client, mainly as a result of the close involvement of the third party funder.
The first difference is that it will be the funder that the solicitor will usually report to (or as a minimum keep up to date on) ongoing time spent on a matter and the overall time costs that may be sought to be subsequently recovered in the event the claim is successful.
Quite often, dependant on how the agreement is drafted, this will mean little or no update on costs is required to be provided to the client (although the regulations do specifically require the client to be kept up-to-date on case progress and development at all times).
The agreement should provide for the client to be indemnified by the 3rd party funder, to ensure there is no possible liability for the risk of having to pay the solicitor’s fees, but otherwise s Collective Conditional Fee Agreement works in a very similar manner as to a standard Conditional Fee Agreement.
From 2013, the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (“LASPO”) prohibited the recoverability of the uplift (or “success fee”) under a Conditional Fee Agreement and so the usefulness of Collective Conditional Fee Agreements have undoubtedly diminished. However, in certain circumstances they may still prove very useful (especially for class actions).
At Francis Wilks & Jones we are extremely familiar with all types of funding models and will seriously consider entering into a Collective Conditional Fee Agreement, subject to assessment of the claim or proposal, and an appropriate risk assessment.
Please call any member of our commercial litigation team for your consultation now. Alternatively e mail us with your enquiry and we will call you back at a time convenient to you.