CFAs can be an effective way of mitigating risk for the client and for you to receive an enhanced return. CFAs require much care. Bad drafting can lead to:
If you are considering offering your client a CFA, then you should read the notes on this topic on PLC which explain what a CFA is and the requirements for creating a valid CFA. You should also follow the CFA guidelines below.
If you retain counsel on a CFA, you must be mindful as to Keystone's potential liability for counsel's fees. Under many standard barrister CFA arrangements, including the Bar Council's and Chancery Bar Association's model documents, the CFA is commonly entered into between counsel and the solicitors, meaning that the solicitors may remain contractually liable for counsel's fees regardless of whether they are able to recover those fees from the client. The precise position will depend on the terms agreed with counsel and this should be considered with the firm's General Counsel. It is often possible to negotiate bespoke terms which alter the default position, including provisions limiting or excluding Keystone's liability for any shortfall in counsel's fees where the client does not pay. Any such arrangements should be agreed expressly and recorded in writing before counsel is instructed.
Keystone therefore generally requires Costs on Account sufficient to cover counsel's fees (including any success fee) unless alternative protections have been agreed. Such protections ma include wording similar to clause 9 basis B, C or D of the Combar Terms or written confirmation that counsel will not look to Keystone to make up a shortfall of fees under any circumstances. If appropriate protections are not in place and the client fails to pay counsel, there is a risk that Keystone may nevertheless remain liable for counsel's fees and you may need to personally meet any award against the Firm in respect of these fees. For more guidance, you should refer to €˜Instructing Barristers.'
Central Office Lawyers are not able to assist on CFA matters, though limited exceptions can be granted on request.