You might think you know what Contingency Fees are, but read on to find out everything you should know before you sign a Contingency Fees Agreement(CFA) with your attorney.
What does contingency mean?
The dictionary defines contingency as:
- a future event or circumstance which is possible but cannot be predicted with certainty.
- a provision for a possible event or circumstance.
- an incidental expense.
Many instructions may have uncertain outcomes in terms of success in relation to the merits and/or quantum of the matter.
Some attorneys are willing to assist clients in the face of uncertainties (contingencies) surrounding their particular cases.
Contingency Fees in the legal sense are fees and expenses payable to your own attorney only in the event of a case with an uncertain outcome, being successful.
If you are consulting with an attorney and fees are discussed, ascertain whether the attorney would be prepared to work on a Contingency basis.
What is a Contingency Fees Agreement?
The Contingency Fees Act 66 of 1997 makes it possible for an attorney to conclude a Contingency Fees agreement with his/her client subject to strict compliance with the Act.
The Contingency Fees Act provides for two types of Contingency Fees agreements being:
- Section 2(1)(a) The attorney will be entitled to his/her normal fees for services, as agreed, only if the client is successful, without any statutory cap being applied;
- Section 2(1)(b) The attorney will be entitled to a normal fee and a success fee (limited to 25% or double the normal fees whichever is lesser) in case of the matter being successful.
Expenses are excluded from both calculations with regard to Fees.
Benefits of a Contingency Fees Agreement (CFA)
A CFA makes it possible for the poor to engage the services of an attorney for legal assistance.
A CFA provides access to the courts for those who cannot afford to pay, up-front, the attorney’s fees and costs, of civil litigation.
Contingency fees, provide an “incentive” for the attorney prepared to engage a client on a contingent/risk basis.
Clients are offered the opportunity to engage an attorney without having to pay for professional services and expenses as at the date of engaging the attorney.
The attorney working on a contingency basis usually carries all the costs which may run into the hundreds of thousands during the adjudication of the claim.
Only when the matter is successfully finalized, as agreed in terms of a valid CFA, will the attorney render a statement of account which is deducted from the proceeds of the claim.
Requirements for a valid Contingency Fees Agreement (CFA)
The Contingency Fees Act 66 of 1997, stipulates, in detail the requirements of a valid CFA.
Make sure the following is contained in the CFA before you sign the agreement:
- The CFA has to be in writing and needs to be signed by both the Attorney and Client.
- The CFA must confirm that you were advised of other ways in which your litigation could be financed, and the implications thereof.
- Your attorney must tell you that if your claim is unsuccessful, you might have to pay the taxed party and party costs of the opposing party.
Make sure that you understand what the difference between party and party and attorney and client fees are.
In short Attorney and Client fees are the normal fees based upon the tariff as agreed and are usually higher than Party and Party costs.
Party and Party costs are a cost contribution recovered from the losing party to assist the successful litigant with his/her legal fees.
Party and Party costs represent any action taken by the attorney to further the process of the claim and does not include items which would otherwise be regarded as a service delivered by the attorney to his/her client.
Party and Party costs may only include reasonable expenses travelling, accommodation etc. the excess being payable as between attorney and client.
The difference between the Party and Party award and normal and success fees are regarded as attorney and client fees.
- The CFA should also explain what is regarded as a success and partial success and what the cost implication would be under both scenarios.
- The method of calculating fees and the amounts payable must be explained.
- The CFA must explain how fees are to be dealt with in case of premature termination of the agreement.
- The CFA must contain a 14 (fourteen) day “cooling off” period in which you can withdraw from the agreement without liability to pay costs.
The “cooling off” period is calculated from the date of the agreement, and you need to give notice to your attorney in writing should you wish to withdraw from the agreement.
- The CFA must explain how any amendments to the agreement will be dealt with.
- You must receive a copy of the signed agreement.
Upon realisation of the agreement, you will be required to sign a Section 4 affidavit, confirming the above, which will be handed up to the presiding officer.
Gert Nel Incorporated fees
In the spirit of allowing a client (in most cases indigent) access to specialist legal representation and the Court, Gert Nel Incorporated renders their services on a contingency basis.
Having regard to the above Gert Nel Incorporated does not require a deposit and will carry the financial burden of expenses or otherwise required to promote and finalize a particular instruction and at their own risk.
As such a “no win no fee” approach is followed, as envisaged in the Contingency Fees Act 66 of 1997, which holds that should the claim for whatever reason not be successful as agreed, no fees nor expenses will be charged, and the matter will be regarded as finalized, without any cost implication to the client.
“Peace of Mind” and access to exceptional legal representation, secured with a Gert Nel Incorporated Contingency Fees Agreement.
The issue of valid Contingency Fees Agreements and the application thereof are often a contentious issue.
The clients of Gert Nel Incorporated have peace of mind in the fact that their agreements are in strict compliance of the Contingency Fees Act.
Upon signing the CFA our clients are privy to one of the best personal injury law firms in the Country, with a proven track record and as a consequence are often the subject of success stories in the printed media.
A Contingency Fees Agreement is your opportunity to avoid the financial burden preventing you from engaging the services of a prestigious law firm like Gert Nel Incorporated.
A Contingency Fees Agreement essentially represents a key to allow clients access to exceptional legal representation which would otherwise not have been possible.
- No Win No Fee Explained – article published in De Rebus in 2018 (June) DR 14.