When you engage a law firm to act on your behalf, you are required to enter into a written agreement regarding how you will be charged for the work performed and when payment of legal fees are due to be paid.
The main types of payment arrangements include interim billing, deferred billing, and what are known as conditional cost agreements.
Interim billing is where bills are sent to the client on an interim basis during the life of the matter. Deferred billing is where the legal costs are payable at the conclusion of the matter.
Conditional cost agreements are generally reserved for personal injury claims that will run for several years and carry significant risk with respect to the successful outcome of the claim.
A conditional cost agreement is where the law firm agrees to only receive payment of its legal fees on the successful conclusion of the claim. In other words, payment of the legal fees is conditional upon a successful outcome. In such circumstances an additional 25% of the incurred legal fees can be charged given the risk being carried by the legal firm for several years and due to the payment being contingent upon a successful outcome.
With a conditional cost agreement, although the time spent by the law firm in acting for you is conditional upon the success of your claim this is not the case for the out of pocket expenses that need to be incurred in running the claim. For example, medical notes and medical reports that are required for the conduct of the file are an out of pocket expense referred to as disbursements and a client has an ongoing obligation to pay those costs as and when incurred under a conditional cost agreement in most cases.
"... an additional 25% of the incurred legal fees can be charged given the risk ..."
A conditional cost agreement is similar to what is often referred to as a “No Win, No Fee” agreement however, the primary difference is the clause regarding an uplift on the legal fees to be charged of up to 25% on a successful outcome. Whether a conditional cost agreement is appropriate for your case depends on the circumstances of the individual case and you should discuss this option with your lawyer at the beginning of any matter.
Other blogs regarding legal costs that may be of interest include:
- Party/party costs, solicitor/client costs, court scale. What does it all mean?
- Legal costs in Family Law