CFAs are on the rise in commercial litigation, says Nichola Evans
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Conditional Fee Agreements (CFAs) were first introduced in the 1990s and the original objective was allow greater access to justice for those who either did not qualify for legal aid or were not wealthy enough to pursue litigation through the courts. Over the years the risk involved in litigation has passed to solicitors from clients and the Legal Services Commission.
Boom-time
The initial boom in the use of CFAs and after the event (ATE) insurance was in the personal injury sphere. Despite the fact that it was originally anticipated that they would be used in relation to other types of claims, CFAs backed by ATE insurance did not take off in commercial claims.
From 1 November 2005 a new regime came into place with the idea that unnecessary regulation would be taken away and courts should not be imposing draconian sanctions against solicitors where only a technical breach of the rules occurred. Cases decided since the new regulations were introduced have been generally supportive of this concept.
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