Conditional Fee Agreement (CFA) vs Damages-Based Agreement (DBA)
Both funding arrangements allow you to pursue a legal claim without paying upfront, but they have different cost structures and risk profiles.
Overview
For many civil claims, particularly personal injury and employment claims, lawyers can act under either a Conditional Fee Agreement (CFA — 'no win no fee') or a Damages-Based Agreement (DBA — a 'contingency fee'). Both involve the lawyer taking a financial risk on the outcome, but the mechanisms and regulatory constraints differ significantly. Understanding the difference helps you choose the right funding arrangement for your case.
Side-by-Side Comparison
Conditional Fee Agreement (CFA)
Pros
- Widely used and well-understood by courts and practitioners
- Success fee and ATE insurance premium payable from damages — not from your own funds
- If you lose, you pay nothing to your own lawyer (but may face opponent's costs unless ATE insurance covers this)
- Maximum success fee cap of 25% of damages in personal injury (and 35% in employment cases after Jackson reforms)
Cons
- Success fee is deducted from your damages — reducing your net recovery
- You need After the Event (ATE) insurance to cover opponent's costs if you lose — premium payable from damages
- Complexity — fees must comply with CFA Regulations and be properly explained
Best For
Personal injury claims, clinical negligence, and commercial disputes where the claim value is significant and the merits are strong. The most common form of no-win no-fee funding.
Damages-Based Agreement (DBA)
Pros
- Simple structure — lawyer takes a percentage of recovery, client keeps the rest
- No complex hourly rate or success fee calculations
- Available in employment tribunal proceedings (capped at 35% of recovery including VAT)
- Aligns the lawyer's incentive directly with maximising recovery
Cons
- If you lose, your DBA lawyer gets nothing — but you may still face opponent's costs
- Maximum cap is 50% of damages (civil proceedings); 35% (employment)
- Hybrid DBAs (partly DBA, partly traditional fee) are legally uncertain following Zuberi v Lexlaw [2021]
- Less common than CFAs — fewer solicitors offer them in practice
Best For
Employment tribunal claims (where DBAs are most commonly used), and high-value commercial disputes where a percentage arrangement is straightforward.
Key Differences
Our Recommendation
For most personal injury and commercial claims, a CFA is the standard and better-understood option. For employment tribunal claims (where opponent's costs are rare and the recovery is a specific monetary amount), a DBA is clean and simple. In both cases, ensure the agreement is explained clearly before signing, and check what happens to costs if the case settles on non-monetary terms. Take advice from a specialist solicitor about which structure is better for your specific claim.