Contingency Fee Agreements

In the case of ATMs, the principle of exemption applies, so that the applicant cannot recover more costs than he has to pay to his own lawyer. Therefore, if the agreed success fee is less than the amount found by a traditional cost assessment, the defendant is only required to pay the lowest amount. It depends on the circumstances. In principle, lawyers and clients may, at their discretion, enter into fees. However, if the Tribunal finds that the contingency fee agreement is inappropriate or unfair, the court may intervene and either invalidate or amend the agreement to make it more reasonable. In determining whether the original fee arrangement was appropriate, the Tribunal may consider several factors, including: Contingency charges have been permitted in South Africa since 1997, as discussed by K.G. Druker in The law of contingency fees in South Africa. [11] (c) This section does not apply to contracts for success fees for the recovery of employee indemnities. Somewhat confusing, the term “contingency fee” is also the term used to describe a type of agreement between a client and a lawyer, with the lawyer only being paid if he or she successfully follows his client`s case. The fundamental principle of a possible fee agreement is that, when issuing an invoice at the end of the case, the lawyer cannot charge his client more than he would have done if he had normally accepted the case. If the case is lost, there are no fees to pay to the lawyer. Third-party funders have developed different types of hybrid agreements to allow law firms to obtain partial payment by the hour, while the case continues with a share of success fees.

Such agreements offer law firms some of the benefits of eventual work, but with a funder who takes on some of the risk. Lord Justice Jackson recommended the introduction of contingency fees in part because he felt it was desirable for the parties to the trial to have as many funding methods as possible, particularly when cfa success fees and ATE insurance premiums would no longer be reimbursable by the losing party (see “Conditional Fee Agreements (CFA s)/after the event (ATE) insurance”).

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