Solicitors Act Contingency Fee Agreements: A Guide for Clients and Lawyers
Contingency fee agreements are a type of legal agreement that allows clients to pay their solicitors a percentage of any monetary award received in a case, rather than paying upfront fees. These types of agreements are sometimes used in personal injury cases, where the client may not have the financial resources to pay upfront legal fees.
The use of contingency fee agreements is regulated by the Solicitors Act 1974, which sets out the requirements for such agreements and provides protections for clients. In this article, we will provide an overview of the key provisions of the Solicitors Act as they relate to contingency fee agreements.
Requirements for Contingency Fee Agreements
Under the Solicitors Act, contingency fee agreements must meet certain requirements in order to be valid. First, the agreement must be in writing and signed by the client. Second, the agreement must specify the percentage of the award that the solicitor will receive, as well as any expenses or disbursements that will be deducted from the award.
Third, the agreement must state how the solicitor’s fee will be calculated if the case is settled before trial, if the case is tried but a judgment is not obtained, or if the case is abandoned or discontinued. Finally, the agreement must include a statement that the client has been advised to seek independent legal advice before signing the agreement.
Protections for Clients
The Solicitors Act provides several protections for clients who enter into contingency fee agreements. First, the client has the right to receive a bill of costs from the solicitor detailing the services provided and the expenses incurred. The bill of costs must be delivered within a reasonable time after the conclusion of the case.
Second, the client has the right to have the solicitor’s fee assessed by the court if the client believes that the fee is excessive. The court will examine the solicitor’s bill of costs and determine whether the fee is reasonable.
Third, the client has the right to terminate the contingency fee agreement at any time by giving written notice to the solicitor. If the agreement is terminated, the solicitor will be entitled to receive a reasonable fee for the work done up to that point.
Benefits and Risks of Contingency Fee Agreements
Contingency fee agreements can be beneficial for clients who cannot afford to pay upfront legal fees. These agreements allow clients to pursue their legal claims without incurring significant financial risk.
However, contingency fee agreements also carry risks for clients. Because the solicitor’s fee is based on the amount of the award, the solicitor may be incentivized to pursue a larger award even if it is not in the client’s best interests. In addition, the percentage of the award that the solicitor receives can be significant, reducing the amount of compensation that the client ultimately receives.
Conclusion
Contingency fee agreements can be a valuable tool for clients who cannot afford to pay upfront legal fees. However, it is important for clients to understand the requirements and protections provided by the Solicitors Act before entering into such an agreement. Likewise, solicitors must ensure that all such agreements meet the requirements set out by the Act. By working together and following the rules set out in the Solicitors Act, clients and solicitors can ensure that contingency fee agreements are fair and effective.