Personal injury CFA: success fee capped at 25% of damages excluding future loss (2013 Order)
Nadia Rahman instructed Pennington Lowe, an SRA-authorised firm in England, under a conditional fee agreement entered into in 2025 for her personal injury claim arising from an accident at work. The agreement provides for a success fee of 100% of base costs and caps it in accordance with the Conditional Fee Agreements Order 2013. The claim settles at first instance for: general damages for pain, suffering and loss of amenity £40,000; past loss of earnings £12,000; and future loss of earnings £80,000. Nothing is recoverable by the Compensation Recovery Unit. The firm's base costs are £30,000. Ignore VAT.
What is the maximum success fee the firm may charge Nadia?
Choose one answer to see the reasoning.
Worked answer
Correct answer D: £13,000.
THE RULE TO REMEMBER
In a personal injury CFA, the success fee at first instance is capped at 25% of general damages and past pecuniary loss, net of CRU recoverable sums (CFA Order 2013 art 5).
Personal injury CFA: success fee capped at 25% of damages excluding future loss (2013 Order)
Under s.58(4A)-(4B) Courts and Legal Services Act 1990 and arts 4-5 of the Conditional Fee Agreements Order 2013, in a personal injury claim at first instance the success fee must be capped at 25% of specified damages. The specified damages are general damages for pain, suffering and loss of amenity and damages for pecuniary loss other than future pecuniary loss, net of sums recoverable by the CRU. Nadia's relevant damages are £40,000 plus £12,000 past loss of earnings, a total of £52,000. Future loss of earnings (£80,000) is excluded. The cap is therefore 25% of £52,000, which is £13,000. The agreed success fee of 100% of base costs would be £30,000, so it is limited to £13,000, which the firm may charge Nadia (from her damages).
Why A is wrong: A 100% success fee of £30,000 exceeds the 25% cap on specified damages and cannot be charged in full.
Why B is wrong: This applies 25% to all damages (£132,000), wrongly including future loss of earnings.
Why C is wrong: This applies 25% to general damages only, wrongly excluding past pecuniary loss.
Why E is wrong: A success fee remains chargeable to the client; what changed in 2013 was recovery from the losing party.
A little more practice done.
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