Skip to main content

Solicitors: Conditional Fee Agreements

Volume 690: debated on Monday 19 March 2007

asked Her Majesty's Government:

What assessment they have made of the practice whereby solicitors retain insurance commission and other payments derived from arranging conditional fee agreements; whether such moneys should be handed over to the clients; and whether they will introduce measures to prohibit such conduct in the future. [HL2515]

The conditional fee agreements (CFAs) regime was reviewed in 2004. This resulted in the changes introduced on 1 November 2005, when the regulations governing CFAs were revoked and the professional rules of conduct and client care code, which solicitors must comply with, were amended by the Law Society.

The professional rules require solicitors to act in the best interest of their clients including informing them about any interest that solicitors may have in recommending insurance. The current rule on receipts of commission by third parties requires solicitors to disclose to their clients any commission received of more than £20, which they may retain only with their client’s agreement. Any solicitor who does not comply with the rules could face disciplinary action.