Are CFA Success Fees recoverable when bringing an Inheritance Act claim?
Following a landmark decision by the Court of Appeal it has now been confirmed that Claimants bringing proceedings under the Inheritance (Provision for Family and Dependants) Act 1975 (‘the Act’) who are funding their claims under a Conditional Fee Agreement (‘CFA’) will no longer lose out when paying their solicitor’s ‘success’ fee.
What is a Conditional Fee Agreement?
A Conditional Fee Agreement (CFA) is a written legal funding agreement, also known as a No Win No Fee arrangement which is entered into between the client and their Solicitor for the purposes of providing litigation services. This provides for the Solicitors fees to be payable in specified circumstances and for the client to pay different amounts for the legal services depending on the outcome of the case. Generally, if the client loses the case, they will not be liable to pay their own Solicitors costs that are subject to the CFA.
If the client wins the case, they will be liable to pay all fees and expenses, including the conditional fees, and a success fee, if a success fee is provided for in the CFA. It should be noted that if a claim fails, although the client would not be required to pay their own Solicitors costs under the CFA, they may still be ordered to pay their opponents Solicitors legal costs.
Court of Appeal Case
The recent Court of Appeal decision has opened the door for the Court to include the amount that the Claimant would be required to pay under the CFA for the success fee to be included as part of the Claimant’s claim for provision from the Estate.
The case in question, Hirachand v Hirachand  EWCA Civ 1498 has now clarified a number of longstanding issues concerning the funding of Inheritance Act claims and whether a solicitors success fees, which are payable under the terms of the Conditional Fee Agreement and usually paid from monies recovered by the Claimant from the Estate, can now be recoverable as part of the claim.
This case concerned an Estate left to a widow on the death of her husband in 2016. Their estranged daughter brought a claim for reasonable financial provision under the Inheritance Act and her claim was funded, as many cases are, by a CFA, also known as a ‘No win, No fee’ agreement. As part of the agreement, there was provision for an ‘uplift/success fee’ to be paid to her own solicitors following a positive outcome.
The daughter was successful in her claim. She argued that any success fees to be paid by her to her solicitors on the conclusion of the claim should be added to the financial settlement made to her from the Estate.
It was argued by the Defendant that if the additional fees were incorporated into her final award in this way then the Estate was effectively paying her legal fees and that that was inequitable. The Court of Appeal disagreed, thereby allowing the daughter to claim the full amount.
“In this case the daughter made a claim for maintenance stating her father’s Will had not provided for her. She won her claim and went on to argue that in deciding what was her rightful share of the Estate, the court had to take into account what her reasonable needs were - and the fact that she would have to pay the success fee was just such a ‘need’ - otherwise the final award would leave her short-changed,” said Pearsons Inheritance and Wills Dispute solicitor, Laura Pracy.
“Now, following this decision, clients can consider making Inheritance Act claims knowing the courts will take account of the true cost of the funding arrangements often needed to pursue these types of claim.
Those clients who are unable to fund their own litigation and often require a CFA to be able to bring a claim can now do so with some reassurance that they will also be able to fund the success fee which previously was not recoverable,” added Laura.
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