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CFA Insurance
Cover addressing fees at risk under conditional fee arrangements.
- A judgment or award won
- A judgment against you
- Funder capital deployed
- Law firm fees and WIPThis cover
- Security for costs
- The opponent's costs
- Disbursements
- Own legal costs
Illustrative. The exposures a dispute can put on a balance sheet. What a policy responds to is set by its wording.
What is CFA Insurance?
CFA Insurance is a form of litigation risk transfer that may be arranged around conditional fee agreement risk. Cover addressing fees at risk under conditional fee arrangements. Terms, where available, are set case by case through underwriting.
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Schedule · specimen
CFA Insurance
Not a policy. A specimen to show how this cover is structured. Cover exists only when a policy is issued, on its own wording.
- Terms
- Terms, where available, are set case by case through underwriting.
- Protects
- Conditional fee agreement risk, depending on policy terms.
- Terms
- Limit, premium and conditions are set by underwriting on the specific risk.
Clause 1
The insured
Who it is for
Firms and clients in England and Wales using conditional fee agreements, where the firm's base or uplift fees are at risk if the case fails.
Clause 2
Insuring clause
What risks can be protected
Base costs the firm has agreed to forgo on losing, the client's adverse costs and disbursements, depending on how the arrangement is structured.
Clause 3
Operation of cover
How it works
The CFA sets what the firm forgoes if the case fails.
Insurance can protect that part, and ATE can protect the client against adverse costs. Since April 2013, success fees and ATE premiums have generally not been recoverable from the losing side, so the economics fall on the parties.
Clause 4
Underwriting
Underwriting factors
The core assessment is the same as for Law Firm Litigation Insurance: merits, quantum, a proportionate budget, recoverability and the legal team.
The points that weigh most for this cover are set out under "What risks can be protected" and "How it works" above.
Clause 5
Proposal documents
Information required
The standard presentation pack described on the Law Firm Litigation Insurance page, plus the documents specific to this cover noted above.
Clause 6
Limit, premium and staging
Potential structure
- (a)Firm-side fee protection combined with client-side ATE;
- (b)Staged cover; and
- (c)Premiums contingent on success.
Clause 7
Alternatives
Alternatives
- (a)A damages-based agreement;
- (b)Hybrid fee arrangements; and
- (c)Third-party funding.
Clause 8
Territory
Jurisdiction notes
Forum rules apply as described on the Law Firm Litigation Insurance page; the jurisdiction guides linked below set out the position forum by forum.
Specimen for explanation only. Terms, limits and exclusions are set by underwriting on each matter and by the wording issued.
Frequently asked
Are CFA success fees recoverable from the losing side?
In England and Wales, generally not for agreements made since April 2013; the success fee is paid by the client, usually from damages.
What does insurance add to a conditional fee agreement?
A CFA shares the firm's fee risk with the client, but does not cover the client's liability for the other side's costs. ATE fills that gap, and firm-side cover can protect the fees the firm forgoes on losing.
Is CFA Insurance available for my dispute?
Availability depends on the merits, the quantum, the costs profile and the counterparty. Every risk is assessed individually and no cover exists until a policy is issued.
Does this quote a price?
No. Pricing is a function of the specific risk and is never quoted in the abstract. Nothing on this page indicates the cost or availability of cover.
Can it be combined with litigation funding?
Frequently, yes. Funding supplies capital; insurance defines the downside. The two are often structured together.
General information only. This page is not legal, financial, investment or insurance advice. Any insurance is subject to underwriting and to the terms of the policy wording issued.
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