Litigation Funding
Conditional Fee Agreement Cost UK 2026: What "No Win No Fee" Really Means
25 percent success fee cap in PI claims. ATE insurance from £200 to £3,000+. QOCS protection means most PI claimants pay nothing if they lose. Worked £25,000 settlement waterfall below.
Litigation funding arrangements are technical and the wording of any CFA, DBA, or ATE policy matters. This page provides general guidance on the framework in 2026 and is not legal advice. Always read the agreement carefully and consult an SRA-regulated solicitor for advice on your specific case.
What a CFA actually is
A Conditional Fee Agreement is a written agreement between the solicitor and the client that pays the solicitor more than the normal base costs if the case wins, and less (often nothing) if the case loses. The legal basis is section 58 of the Courts and Legal Services Act 1990, supplemented by the Conditional Fee Agreements Order 2013. The agreement specifies the success fee as a percentage of the base costs (e.g. 100% means double base costs on a win). The success fee compensates the solicitor for the risk of taking on cases that might fail.
CFAs are most common in personal injury, clinical negligence, professional negligence, and some commercial disputes. Eligibility for a CFA depends on the prospects of the case. Solicitors typically require prospects of 60% or above to take a case on a CFA. Borderline cases (50-50 or below) may be declined or offered on different terms. Solicitors carry the financial risk of failed cases on their balance sheet, so case-selection discipline is built into the funding model.
The 25 percent success fee cap (PI only)
In personal injury cases, the solicitor's success fee under a CFA is capped at 25% of certain heads of damages. The Conditional Fee Agreements Order 2013 (article 5) caps the success fee at 25% of: damages for pain, suffering and loss of amenity (PSLA); damages for past loss of earnings; and damages for past care. Excluded from the cap: damages for future loss of earnings, future care, and future treatment. The cap is intended to preserve future losses for the claimant's actual long-term needs.
The cap is on the success fee, not on the base costs. The solicitor still recovers base costs from the losing defendant under the costs-shifting rules in CPR Part 44 (subject to QOCS protection on the claimant side). The 25% deduction from damages therefore represents the additional uplift the solicitor receives for the risk of the case, not the total fee. Clients should ask for a clear estimate of expected base costs, expected success fee, and expected net damages before signing.
Outside PI, the 25% cap does not apply. In commercial disputes, employment tribunal cases, professional negligence, and other civil litigation, success fees can be set at up to 100% of base costs. There is no statutory cap on the damages deduction, although the SRA Code of Conduct requires the agreement to be in the client's best interests and the principles of fairness in Carver v BAA apply.
Damages-Based Agreements (DBA): the alternative
A Damages-Based Agreement is an alternative funding model where the solicitor receives a percentage of the damages recovered, with no separate base cost component. The legal basis is section 58AA of the Courts and Legal Services Act 1990 and the Damages-Based Agreements Regulations 2013. DBA caps: 25% in personal injury (including future losses, unlike the CFA cap which excludes them), 35% in employment tribunal matters, and 50% in other civil cases.
DBAs are conceptually simpler for the client: a single percentage taken from damages, no separate fee calculation. In practice, DBAs have been less popular than CFAs because the 2013 Regulations have been found ambiguous in several Court of Appeal decisions (Lexlaw Ltd v Zuberi, Diag Human v Volterra Fietta). Many practitioners view the regulatory risk of DBA drafting as a deterrent. The Civil Justice Council reviewed DBAs in 2019 and recommended redrafting; no statutory replacement has yet been introduced.
For most personal injury claimants in 2026, a CFA combined with QOCS protection is the standard funding route. DBAs remain available and may be appropriate in specific situations (e.g. high-value commercial litigation where the solicitor and client prefer pure outcome-linked funding).
QOCS and after-the-event insurance
Qualified One-Way Costs Shifting was introduced for personal injury claims in April 2013 by the Civil Procedure (Amendment) Rules 2013, at CPR Part 44.13 to 44.17. QOCS reverses the general costs-shifting principle for PI cases: a losing PI claimant does not pay the defendant's costs in most cases. The reform was a quid pro quo for abolishing recoverability of ATE premiums from defendants under LASPO 2012.
QOCS has exceptions. The protection does not apply if the claim is struck out as an abuse of process, if the court finds the claim was fundamentally dishonest (CPR 44.16), or if the claimant fails to beat a defendant's Part 36 offer at trial. In Part 36 cases the costs liability is enforceable only up to the value of any damages awarded, so a claimant who wins the case but fails to beat the offer typically receives reduced damages but does not pay the defendant cash out of pocket.
After-the-event (ATE) insurance remains relevant in 2026 in several contexts: non-PI litigation where QOCS does not apply, cases with fundamental-dishonesty risk, cases with significant disbursements that the claimant would otherwise need to fund (expert fees, court fees, counsel), and Part 36 exposure mitigation. Typical ATE premiums in 2026: £200 to £500 for low-value PI, £500 to £1,500 for mid-value PI, £1,500 to £3,000+ for catastrophic injury PI, and £5,000 to £25,000+ for commercial litigation. Premiums are typically deferred (paid only on win) and self-insured (the policy covers its own premium if the case loses). Premiums are no longer recoverable from the losing defendant under LASPO 2012 (with limited exceptions for clinical negligence expert fees only).
Worked example: £25,000 PI settlement waterfall
A claimant suffers a workplace injury. The claim settles at £25,000 in damages, allocated as: £18,000 PSLA, £4,000 past loss of earnings, £3,000 future loss of earnings. The solicitor's base costs are £8,000 plus VAT, recovered from the defendant under the costs order. The CFA provides for a 100% success fee. ATE premium of £500 is deferred and self-insured.
| Item | Amount | Who pays |
|---|---|---|
| Total damages | £25,000 | Defendant to claimant |
| Base costs (recovered) | £8,000 + VAT | Defendant to solicitor |
| Cappable damages (£18k PSLA + £4k past earnings) | £22,000 | (base for 25% cap) |
| Success fee at 25% cap (capped from 100% uncapped) | £5,500 | Claimant out of damages |
| ATE premium | £500 | Claimant out of damages |
| Net to claimant | £19,000 | After deductions |
The claimant receives £19,000 net (76% of headline damages). The solicitor receives £8,000 base costs plus VAT from the defendant plus £5,500 success fee from the claimant, totalling £13,500 plus VAT. The headline 100% success fee was reduced by the cap to £5,500 (25% of £22,000) rather than the uncapped £8,000 (100% of base costs). Without the cap, the claimant would have received £17,000 net. The cap preserved £2,000 of damages for the claimant.
Sensitivity analysis: if the case had been more complex with £20,000 base costs and a 100% success fee, the uncapped success fee would have been £20,000, but the cap would still hold the deduction at £5,500. The cap is generous to claimants in high-base-cost cases and modest in low-base-cost cases.