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Published online by Cambridge University Press: 07 June 2023
There has never been any prohibition on a solicitor entering into an agreement with a client whereby the solicitor will only charge a fee if the piece of work they are instructed to do is successful (or partly successful) and charge no fee if it is not. That applies to all types of business, not simply litigation, and the fee can be a fixed fee (as opposed to an hourly rate), only payable on success.
Since 1992, a solicitor and client may agree, in relation to a litigation undertaken on a speculative basis, that, in the event of the litigation being successful, the solicitor’s fee shall be increased by such a percentage as may be agreed. The maximum percentage increase is prescribed by Act of Sederunt at 100 per cent.
This means that there are now three ways of entering into a speculative (known in England as a ‘conditional’) fee agreement:
(1) The solicitor can accept the judicial expenses that they get from the opponent and at the same time charge their client a success fee that should be no more than 100 per cent of the judicial fees. The success fee calculation is not based on the total of the judicial account, i.e. it ignores those parts relating to copying and the part of the process fee and posts and incidents exigible thereon as well as any additional fee/ charge and outlays. Nothing is charged to the client if the action is unsuccessful.
(2) Alternatively, the solicitor can charge their client on an agent/client basis and can, if they wish, set the charge out rates at a higher level than they normally would to reflect the speculative nature of the work. However, if the client’s fees are based on an agent/client account, no success fee can be charged. The recovered judicial expenses require to be offset against the agent/client account. Nothing would be charged to the client if the action is unsuccessful.
(3) The third option is for the solicitor and client to enter into a written fee-charging agreement setting out the level of fee recoverable if the case is successful. This can be a fixed fee. No additional success fee can be charged.
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