Notice of Right to Cancel a CFA
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Conditional Fee Agreements are subject to the same requirements as any other contract and; therefore, usually require a Notice of Right to Cancel a CFA for one to be binding.
The Consumer Contract (Information, Cancellation and Additional Charges) Regulations 2013 applies to CFAs. The requirements on the Notice of Right to Cancel a CFA vary based on the type of contract, whether it is an on-premises contract, an off-premises contract or a distance selling contract.
On Premises Contract
An on-premises contract takes place between a client and a solicitor in the Solicitor’s office. The client cannot be a business. Under Regulation 9(1), the Solicitor must provide the client with the relevant information for the CFA to be binding (Schedule 1 (a) – (k))
If all the relevant information is not given, then the CFA is not enforceable. The burden of proof rests with the Solicitor to prove that all the correct information has been provided. If this can be satisfied, then the CFA remains valid and enforceable.
If the CFA is enforceable and it was made on premises, there is normally no cancellation period given and no Notice of Right to Cancel is required.
Off premises and Distance Selling CFA
An off-premises contract is one which takes place away from the Solicitor’s office. It can be the client’s home, for example.
A distance CFA is one where the Solicitor and client were not both physically present at the time of when the CFA was entered into, for example, online.
For these types of CFAs to be valid and enforceable, the Solicitor has to provide numerous information to the client as per Schedule 2 of the 2013 Regulations. This Schedule includes information around procedures and time limits, for example.
Unlike an on-premises contract, an off-premises and distance selling contract or CFA gives the client the right to cancel the agreement.
The cancellation period is 14 calendar days from the date the contract is entered into. The client is not required to provide a reason for the cancellation. The cancellation does not have to be in writing, and the cancellation remains valid as long as the client provides a clear statement stating they wish to cancel.
A cancellation form must be given to the client as per Schedule 3 of the Regulations. When the client is given a cancellation form to use, they are not required to use this. As stated above, the client simply needs to make a clear statement stating they wish to cancel, as per Regulation 32.
If the client chooses to use the cancellation form, the Solicitor must acknowledge it. If there is a dispute which arises, the burden falls on the client to show that they provided notice of cancellation within the relevant cancellation period.
Regulations 28 and 29 (1) refer to when the client cannot cancel, namely when the client requests that work is started before the cancellation period is over.
If the Solicitor fails to provide a Notice of Right to Cancel a CFA, along with the time limits and procedure for cancelling, then the cancellation period is extended. If the Solicitor fails to give the client notice of right to cancel, then the CFA is not enforceable until the client is given the correct notice or a period of 12 months and 14 days have passed.
In line with Regulations 33 and 34, cancelling the CFA within the relevant cancellation period ends the agreement and obligations of both parties involved with the contract.
How Can ARC Costs Assist?
Terminating a CFA outside the cancellation period may result in legal costs being sought against you. Late termination of a CFA can result in Solicitor’s fees which you may wish to dispute. ARC Costs can provide assistance in challenging legal fees.
If you require assistance on either challenging legal fees or trying to recover the legal fees which you may be entitled to, then ARC Costs will be able to assist. We hold vast experience in acting for both the receiving party and the paying party. Please feel free to get in touch if you need to discuss your specific costs query. We can be contacted using the form at the top of the page, email email@example.com or call 01204 397302.