No Win No Fee Lawyers: Benefits of Contingency Agreements

A contingency fee agreement in South Africa is a written, capped fee arrangement under the Contingency Fees Act 66 of 1997 (“the Act”) that lets a plaintiff instruct an attorney on a claim without paying fees upfront — the attorney is remunerated only if the claim succeeds, and the fee is limited to a statutory cap expressed as a percentage of the recovered amount. For a client with a meritorious claim but no ready cash to fund litigation, the practical benefits are access to the courts, removal of the upfront fee risk, and the certainty that the attorney only gets paid when the client does, subject to the agreement meeting the Act’s formalities (in writing, signed, and specifying the matter and the success fee). A contingency fee arrangement is not the same as “no win, no fee” advertising shorthand used by some firms, and not every type of claim qualifies — the Act expressly excludes matters such as criminal defence and certain family-law disputes.

What a Contingency Fee Agreement Actually Is

A contingency fee agreement is a fee arrangement in which the attorney’s fees depend on the successful outcome of the matter. In South Africa it is governed by the Contingency Fees Act 66 of 1997, read with the Contingency Fees Regulations published under it (Government Notice R547 in Government Gazette 20009, in force from 23 April 1999, hosted on SAFLII as the consolidated regulatory text).

It is distinct from two other fee arrangements clients commonly encounter:

• Ordinary (time-based) fee: the client pays the attorney for time worked, regardless of whether the matter succeeds.
• Pro deo (reduced or no-charge) fee: the attorney absorbs the cost or charges a reduced fee, typically for means-tested or public-interest matters.

A valid contingency fee agreement must always be in writing and signed by the client. The agreement must describe the matter, set out the fee structure, and disclose the success fee — and it must be signed before any work is done that is to be charged on that basis. The Contingency Fees Regulations prescribe a formal schedule (the “Contingency Fees Agreement in terms of the Contingency Fees Act 66 of 1997”), which forms the standard form any compliant agreement follows.

Burger Huyser Attorneys’ general litigation practice advises prospective plaintiffs on whether the formalities above can be met for a specific matter before any contingency fee agreement is signed. Civil litigation across the firm’s Gauteng branches is run through its litigation department, which is the practical entry point for a first conversation about whether a particular claim is suited to this fee structure.

The Statutory Framework: Contingency Fees Act 66 of 1997

The Contingency Fees Act 66 of 1997 is the controlling statute. Section 2 of the Act limits contingency fee arrangements to proceedings in a court, tribunal or functionary with the powers of a court, certain licensing or regulatory matters, professional services, and arbitration proceedings — and expressly excludes:

• criminal proceedings (defence of criminal charges), and
• family-law matters.

The Contingency Fees Regulations made under section 3(1)(a) of the Act set out the form and content of valid agreements. Key requirements confirmed by the Regulations include:

• Written and signed by both attorney and client, with the client receiving a copy of the signed agreement on the date of signing (section 3(4) of the Act).
• Pre-signing disclosures under section 3(3) of the Act — the client must be advised of other ways of financing the litigation and their respective implications, of the ordinary rule that an unsuccessful party may be liable for the taxed party-and-party costs of the successful opponent, and that the client will owe the success fee on success.
• Caps on the success fee: it may not exceed the attorney’s normal fees by more than 100 per cent, and in claims sounding in money the total success fee may not exceed 25 per cent of the total amount awarded to or obtained by the client in consequence of the proceedings (costs not included).
• A 14-day cooling-off period, calculated from the date of signing, during which the client may withdraw from the agreement in writing.

The Legal Practice Council (LPC) is the body established under the Legal Practice Act 28 of 2014 that regulates the professional conduct of all legal practitioners (attorneys and advocates) and oversees compliance with the Act’s fee arrangements — including contingency fee agreements. Any aggrieved client can refer an unreasonable provision of a contingency fee agreement, or any fee claimed under one, to the relevant provincial council under the LPC’s complaints process.

The Benefits of a Contingency Fee Agreement

For a plaintiff who has a claim with reasonable prospects of success but limited cash to fund litigation, a properly drawn contingency fee agreement offers five interlocking benefits.

1. Access to litigation without upfront fees. A plaintiff with a valid claim but no ready cash to fund litigation can still instruct an attorney.
2. Aligned incentives. Because the attorney is paid only on success, the attorney’s commercial interest is aligned with the client’s — both succeed or neither does.
3. Cost risk shifted to the attorney during the matter. Disbursements, time and opportunity cost sit with the attorney while the matter runs; the client does not owe fees if the claim fails.
4. Capped and transparent fee. The success fee is set as a percentage in the agreement, giving the client a clear picture of maximum fee exposure on a successful outcome.
5. Predictable net recovery. Because the percentage is agreed up front, the client can estimate net recovery at different settlement or judgment outcomes before signing.

Contingency fees are particularly useful in claims with strong merits but thin evidence of the defendant’s ability to pay costs — the kind of dispute where a plaintiff could not, under a conventional fee, afford the cost risk of pursuing a defendant who may turn out to be impecunious.

Contingency Fee vs Ordinary Fee vs Pro Deo vs Legal Aid

Arrangement	Who carries cost risk during the matter	Client pays if claim loses?	Typical use case
Contingency fee	Attorney carries fee risk during the matter.	No attorney fees owed (client may still be liable for own disbursements per the agreement and for the opponent’s taxed costs).	Plaintiff civil claims with reasonable prospects of success.
Ordinary fee (time-based)	Client carries all fees as work is done.	Yes — client pays for all time worked regardless of outcome.	Most litigation and advisory work.
Pro deo / reduced fee	Attorney absorbs cost or charges a reduced fee.	Varies — depends on the arrangement.	Means-tested matters and certain public-interest cases.
Legal aid	State-funded through Legal Aid South Africa.	No — funded by Legal Aid South Africa, subject to means and merits tests.	Qualifying indigent clients on defined matters.

What a Valid Contingency Fee Agreement Must Contain

The Contingency Fees Regulations prescribe the matters the agreement must address. A compliant agreement will set out:

• The identifying details of the client and the attorney, including full names, addresses and any authorised representative for the client.
• A description of the matter to which the agreement applies, naming the court, tribunal, functionary or arbitration forum before which the proceedings will be conducted.
• The attorney’s opinion that the matter has reasonable prospects of success.
• Disclosure of the other ways of financing the litigation, the ordinary rule on taxed party-and-party costs, and the obligation to pay the success fee on success.
• The success fee as a percentage of the recovered amount (or a stated Rand amount / formula), within the statutory caps.
• The basis on which the attorney and own client scale of fees is calculated (hourly, daily or applicable rate).
• How disbursements are to be dealt with on success and on failure.
• The position on partial success and on premature termination of the agreement.
• Signatures of both parties, dated before any work is done on the contingency-fee basis.

When a Contingency Fee Is and Is Not Available

A contingency fee agreement is appropriate for most plaintiff civil claims with reasonable prospects of success — including contractual disputes, certain delictual claims, and motor-vehicle accident claims handled by plaintiff’s attorneys.

A contingency fee is not available, however, where:

• The Act expressly carves the matter out — criminal defence and family-law matters are excluded by section 2 of the Contingency Fees Act.
• The merits are weak — the Regulations require the attorney to record that, in the attorney’s opinion, there are reasonable prospects of success.
• The defendant has no realistic prospect of paying a recovery, regardless of how strong the claim is on the merits.
• A statutory fee tariff already applies in a way that conflicts with the Act’s caps.

An attorney should always confirm in writing whether a specific matter qualifies before any agreement is signed.

Practical Considerations for a Client Considering a Contingency Fee

Before signing, a client should walk through the following points with the attorney and confirm each in writing in the agreement itself.

Point to confirm	Why it matters
Success fee percentage	The figure is set in writing before signing, and the client should ask how it interacts with any party-and-party costs recovered from the other side.
Disbursements	Confirm who pays disbursements (filing fees, expert reports, sheriff fees) during the matter, and what happens to them on failure.
Settlement vs trial	Confirm how the fee is calculated on a settlement recovered before trial versus a judgment after trial.
Termination	Understand what happens if either party wants to end the agreement, and what the client’s fee exposure is at that point. (A premature-termination clause is required by the Regulations.)
Taxed costs on the other side	If the claim fails, the client may still be liable for the successful defendant’s taxed costs. This is not removed by the contingency fee and is one of the section 3(3) disclosures the agreement must record.

The 14-day cooling-off period built into the Regulations gives the client a further window to withdraw in writing after signing, but the practical questions above are best answered before the agreement is signed at all. Burger Huyser Attorneys’ general litigation practice handles these intake conversations from its head office in Linden, Randburg and through its Gauteng branches, and files thereafter run through the firm’s litigation department on a per-matter basis.

Frequently Asked Questions

What is a contingency fee agreement in South Africa?

A contingency fee agreement is a written fee arrangement under the Contingency Fees Act 66 of 1997 in which an attorney is paid a percentage of the amount recovered only if the claim succeeds. It must be in writing, signed by the client, and clearly state the success fee. The Act excludes certain matters, including criminal defence and family-law matters, from being charged on this basis.

What are the main benefits of a contingency fee agreement?

The main benefits are access to litigation without upfront fees, aligned incentives between attorney and client, the cost risk sitting with the attorney during the matter, and a capped, transparent fee set as a percentage in the agreement. The client does not owe the attorney fees if the claim is unsuccessful.

Is a contingency fee the same as “no win, no fee”?

In everyday South African usage the two phrases describe the same commercial idea: the client pays nothing if the claim fails. Legally, the term of art is “contingency fee agreement” under the Contingency Fees Act 66 of 1997, which carries specific formalities (writing, signed, percentage disclosed). Marketing language on a website is not the same as a compliant contingency fee agreement; clients should always ask to see the written agreement before signing.

Are there matters on which an attorney cannot charge a contingency fee?

Yes. Section 2 of the Contingency Fees Act 66 of 1997 expressly excludes criminal proceedings and family-law matters from contingency fee arrangements. Other matters may be excluded by the Act’s carve-outs, and an attorney should confirm in writing whether a specific matter qualifies before any agreement is signed.

Does the client have to pay anything if the claim fails?

Under a valid contingency fee agreement, the client does not owe the attorney fees if the claim fails. The client may, however, still be liable for the successful defendant’s taxed costs (the costs the court awards against the losing party) and for any disbursements the agreement places on the client — these points must be addressed explicitly in the agreement as part of the section 3(3) disclosures.

How is the success fee calculated?

The success fee is calculated as a percentage of the amount recovered (whether by settlement or judgment), and the percentage is set out in the written agreement before any work is done. The Contingency Fees Regulations cap the success fee at no more than 100 per cent above the attorney’s normal fees, and for claims sounding in money, the total success fee may not exceed 25 per cent of the total amount awarded to or obtained by the client (costs excluded).

If you are weighing up whether a contingency fee arrangement makes sense for a specific claim, Burger Huyser Attorneys’ general litigation practice can take you through the Act’s formalities and the practical questions — who carries disbursements, how the success fee is calculated, and what the cost exposure looks like if the claim is unsuccessful — before you sign anything. Initial consultations are booked through the head office in Linden, Randburg (011 888 0246) or via any of the firm’s Gauteng branches. Burger Huyser Attorneys carries a 4.8/5 average across 250+ Google reviews (Trustindex verified “Top Rated Law Firm in South Africa”) and handles civil litigation across Gauteng.