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Contingency matters

11 March 2010 / Kerry Underwood
Issue: 7408 / Categories: Features , Damages , Commercial
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Kerry Underwood welcomes the first steps to full contingency fees

Contingency fee agreements are prohibited in any issued case in the High Court or County Court in England and Wales, but this may be about to change, as a result of the Jackson Report.

“Contingency fee” is used to describe an agreement by which the client’s lawyer is only paid if the claim is successful and is then paid out of damages received, usually as a percentage of those damages, the percentage being fixed in advance of the claim being made. Pure conditional fee agreements are a form of contingency fee in that the client’s obligation to pay is contingent upon winning but that extra fee is a percentage uplift on costs and is unrelated to damages.

Success fees conditional

No win, lower fee conditional fee agreements, increasingly used in commercial cases, are a strange hybrid where, as the name suggests, the solicitor gets a higher hourly rate for winning, but still gets paid in the event of defeat, albeit a lower fee.

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