Conditional Fee Arrangements for Defamation: No Win, No Fee Explained

Defamation cases can be expensive — but they don't have to be unaffordable. Conditional Fee Arrangements (CFAs), commonly known as "no win, no fee" agreements, allow claimants to pursue defamation claims without paying legal fees upfront. If the case is unsuccessful, the claimant pays nothing; if successful, the solicitor receives their fees plus a "success fee" from the damages awarded. CFAs have democratised access to defamation justice in the UK.

How CFAs Work in Defamation Cases

A CFA is a legally binding agreement between a solicitor and their client. The key features are:

• No upfront fees: The solicitor agrees not to charge fees unless the case succeeds
• Success fee: If the case succeeds, the solicitor charges their normal fees plus a success fee (capped at 100% of the base fees). In defamation cases, the success fee is paid from the claimant's damages
• Risk assessment: Solicitors will only offer CFAs for cases they believe have a reasonable prospect of success — typically 60% or higher
• Disbursements: Court fees, expert fees, and other disbursements may still need to be paid by the client, thoughAfter the Event (ATE) insurancecan cover these

Are Defamation Cases Suitable for CFAs?

Not all defamation cases are suitable for CFA funding. Solicitors consider:

• Merits of the claim: Is the statement clearly defamatory? Can the serious harm testbe met?
• Available defences: Is the defendant likely to have a strong truth, honest opinion, or public interest defence?
• Defendant's means: Can the defendant pay damages and costs if the claim succeeds?
• Evidence: Is there sufficient evidence to support the claim?
• Proportionality: Are the likely damages proportionate to the costs of litigation?

The Success Fee Cap

Following the Jackson reforms, success fees in defamation CFAs are capped and cannot exceed 100% of the solicitor's base costs. Importantly, success fees are now paid by the successful claimant from their damages — not by the losing defendant. This means claimants should understand that their damages award will be reduced by the success fee.

Courts have power to assess the reasonableness of success fees, providing a safeguard against excessive charges.

ATE Insurance: Protecting Against Adverse Costs

One of the biggest risks of litigation is an adverse costs order if the case is unsuccessful. After the Event (ATE) insurance protects claimants against this risk by covering the defendant's legal costs if the claim fails.

In defamation cases, ATE premiums can be significant due to the inherent unpredictability of jury trials and the potential for high costs. The premium is typically payable only if the case succeeds (a "deferred premium"), making it effectively risk-free for the claimant.

CFAs vs Other Funding Options

• Damages-Based Agreements (DBAs): The solicitor receives a percentage of the damages (capped at 50% in non-personal injury cases). Less common in defamation but available
• Before-the-Event insurance: Some household and professional insurance policies include legal expenses cover that may extend to defamation claims
• Third-party litigation funding: Professional funders may finance high-value defamation cases in exchange for a share of the proceeds
• Private retainer: Paying fees as you go — provides maximum control but requires financial resources

Questions to Ask Your Solicitor

1. What is the proposed success fee percentage?
2. What disbursements will I need to pay, and when?
3. Is ATE insurance available, and what will the premium be?
4. What happens if the case settles early?
5. What is your realistic assessment of the likely damages?
6. After the success fee and ATE premium, how much of my damages will I retain?

Practical Considerations

When considering a CFA for a defamation claim:

• Get specialist advice: Not all solicitors offer CFAs for defamation. Seek a firm with specific defamation expertise and CFA experience
• Understand the terms: Read the CFA carefully, including termination provisions and what happens if you withdraw
• Consider mediation:Mediationcan resolve cases faster and more cheaply, preserving more of your damages
• Act quickly: Theone-year limitation periodmeans you cannot delay seeking legal advice

Related reading: Defamation lawyer costs | Defamation insurance | Finding the right solicitor