No cure, no pay – and still paid: 40 percent reasonable fee for debt advisor
What is an adviser working on a no cure, no pay basis entitled to if the client ends the engagement early? In a judgment of 13 October 2026, the Amsterdam Court of Appeal held: no success fee, but a reasonable fee for the work done.
The facts
In January 2023, a real estate investment vehicle engaged a debt advisor to refinance its portfolio. The fee was success-based: 0.285 percent of the loan amount at closing. During the engagement, the client opted for an extension option in its existing financing of EUR 88 million – an option that had not been disclosed to the advisor in advance. The client was only willing to pay the cancellation fee of EUR 12,500; the advisor claimed the full fee of EUR 250,800.
No success, but no free work either
The court of appeal considers that the success fee is not due: the agreed result was a new, long-term refinancing, and that did not happen. However, a no cure, no pay arrangement does not automatically mean that the advisor accepts the risk of receiving nothing if the engagement ends prematurely. As only part of the work had been done – the first four phases and part of the fifth – the court sets the reasonable fee under Article 7:411 of the Dutch Civil Code at 40 percent of the fee: EUR 100,320, plus statutory commercial interest.
What this means
For clients and advisors alike, a mandate letter that only regulates the success scenario leaves room for discussion. If the transaction takes a different route, the court will fill the gap, with an outcome that neither party may have expected.
Practical tips
Agree in the mandate what is payable if the transaction takes a different form or does not go ahead.
As a client, disclose relevant alternatives, such as extension options, at the start of the engagement.
Link any termination or break fee to the phases of the work, so the outcome is predictable.
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This blog provides general information and is not legal advice. For advice on a specific situation, please contact us.
