Which statement correctly describes the cap on the CFA's success fee?

Which statement correctly describes the cap on the CFA's success fee?

• A. Up to 50% of base costs.
• B. The general cap on the success fee is up to 100% of base costs.
• C. There is no cap.
• D. Cap is based on damages.

Answer: (B)

The main idea here is how the uplift in a conditional fee arrangement (the success fee) is limited. The general cap is that the success fee can be up to 100% of the base costs. In practice, this means the uplift on the solicitor’s base costs cannot exceed those base costs themselves; you can’t have a higher percentage uplift than that. This cap protects clients from excessive charges and keeps the recovery from the other side within reasonable limits. So why this matters: the success fee is designed as a reward for taking on risk, but it’s paid as an uplift to the base costs, not as a separate, unlimited charge. The other options don’t fit because 50% is not the standard cap, there is a cap in place, and the cap isn’t determined by the amount of damages but by the base costs.

The main idea here is how the uplift in a conditional fee arrangement (the success fee) is limited. The general cap is that the success fee can be up to 100% of the base costs. In practice, this means the uplift on the solicitor’s base costs cannot exceed those base costs themselves; you can’t have a higher percentage uplift than that. This cap protects clients from excessive charges and keeps the recovery from the other side within reasonable limits.

So why this matters: the success fee is designed as a reward for taking on risk, but it’s paid as an uplift to the base costs, not as a separate, unlimited charge. The other options don’t fit because 50% is not the standard cap, there is a cap in place, and the cap isn’t determined by the amount of damages but by the base costs.