WHEN YOUR CFA IS A DBA
The personal injury market is clearly settling at 25% of damages plus recovered costs, which is hardly surprising given the very sharp reduction in recoverable costs.
Lawyers need to beware of the trap whereby a CFA unwittingly becomes a DBA, with all that goes with it.
You want to charge your client 25% in the event of a win and nothing if you lose. The CFA has that as the charging basis.
That is in fact a DBA and you must give credit £ for £ for all money received from the other side AND the indemnity principle applies, limiting recovery from the losing party to a sum equal to 25% of damages.
Defendants cannot challenge a non-recoverable success fee, but can ask for clarification of the retainer to check that they have a liability to pay.
Claiming a sum that is not due is “a most serious disciplinary offence” – see
Post 1 April CFAs need drafting with considerable care.