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Conditional Costs Agreement

For the work related to the case, you can only charge fair and reasonable costs. Their costs must also be reasonable and proportionate to related work. Since the beginning of the Law reform of the legal profession in 1993, on 1 July 1994, conditional cost agreements for car accidents have been commonplace. However, this situation will change as a result of amendments to the Motor Vehicle Compensation Act 1999. Under the 1999 Motor Vehicle Compensation Regulation (No. 2), a lawyer must enter into a cost agreement „other than a conditional cost agreement“ to participate in the costs of the firm parties. Therefore, the law does not prohibit conditional cost agreements for car accidents. A practitioner who wishes to enter a physician could do so, but would limit himself to charging the fixed fees contained in the Motor Vehicle Compensation Regulation (No. 2) of 1999 and would not be able to collect an additional premium. Thus, even if there is no prohibition of conditional cost agreements in the event of a car accident, the rules make them a little useless. A conditional cost agreement is an agreement whereby the payment of all the practitioner`s costs depends on the success of the case in which the lawyer provides legal services: Legal Profession Act 1987, s 186 (1) and (2). There have been some remarks on the use of the word „all“ in this definition, suggesting that a practitioner cannot enter into an agreement partially with conditions (with the exception of payments that may be excluded: s 186 (5)). The alternative proposal is that such an agreement should not be covered by the maximum premium limits discussed below.

These „conditional cost agreements“ must be concluded in writing and must be clear. You must include all the conditions that you define as a successful result, and they must be accepted in writing or cannot be applied. There are strict rules on how to deal with cost agreements. If you do not comply with these rules, the agreement may be cancelled, even if your client has accepted it. In the past, lawyers were previously prohibited from offering CCAs to their clients because they had such „speculative“ agreements, to which they automatically gave a direct financial interest to lawyers. A conditional cost agreement is the case where the registry agrees to pay its legal fees only upon the success of the claim. In other words, the payment of legal fees depends on a successful outcome. Under these conditions, 25% of the additional legal fees may be charged, as the firm carries the risk for several years and the payment depends on a successful outcome. In the area of bodily harm because of the ease and accuracy of the assessment whether a complainant`s case will be successful or not, lawyers often propose to cover 100% of the costs of trial in the event of an unsuccessful result. However, there is no 100% risk-free available for all types of legal issues.

If a deal is successful, an agreement on conditional costs may provide a premium on otherwise-paid costs: s 187 (1). The premium must be equal to a percentage of otherwise payable or a certain amount. The premium is shown separately in the agreement: s 187 (2). The maximum premium is 25%: s 187 (3). Since costs are set to include payments 3, paragraph 1, there does not appear to be a statutory prohibition having a premium on payments. The conclusion of an agreement on conditional costs will consist of two clear phases.


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