Law: Justice for the not-so-rich

'No-win, no-fee' deals mean we can all afford lawyers. So look forward to lots of litigation.

TOWARDS THE end of last year, The Sun published a "sleazeometer" review of sexual scandals, listing a number of Labour MPs supposedly involved in affairs, divorces or incidents of improper sexual conduct since the May 1997 general election.

The article included a reference to Helen Brinton, MP for Peterborough, implying that a complaint about noise coming from her constituency flat was caused by some undefined sexual activity. She was, in fact, giving a dinner party.

Mrs Brinton issued a writ for libel through her solicitors, Peter Carter- Ruck and Partners, "because the article was quite plainly not only wrong, but also totally and utterly defamatory". In an out-of-court settlement last month, The Sun agreed to pay "substantial" damages to the MP, and to print an apology in the paper.

But without the crutch of a conditional fee agreement (CFA), Mrs Brinton says she could not have brought the proceedings.

"It is usually high earners, often in the entertainment and publicity fields, who have the resources to bring these claims. This no-win, no- fee arrangement makes it easier for people at all levels, including Labour MPs - not just the very rich - to take action against those who try to smear their names."

Conditional fee arrangements allow lawyers and clients to enter into an arrangement whereby the client pays next to nothing if he loses, but the lawyer can charge a success fee if he wins. Although the solicitor can, in theory, increase his usual charges by a premium of anything up to 100 per cent, the Law Society recommends a cap of 25 per cent. And their research shows that the bulk of solicitors are keeping to this voluntary limit.

Although CFAs were first introduced in 1995, lawyers were initially restricted to offering them to claims for personal injury, insolvency or human rights issues. Then in July last year, the scheme was extended to cover all civil proceedings - except family law cases - as a way of ensuring greater access to justice, but this was also seen as a way for the Government to trim the legal aid budget.

That prompted solicitors Peter Carter-Ruck and Partners to launch the first scheme offering a conditional fee agreement in defamation cases. Alasdair Pepper, a partner at the firm, explains that "because legal aid has not been available in defamation cases, the principle of "justice for all" has been blighted. This new scheme should help some to seek redress who might not previously have been able to."

But there are still risks attached to the scheme. Although the client does not pay his lawyer's costs if he loses, he is still liable for any disbursements incurred (such as barrister's fees) and any costs incurred by his opponent. Most solicitors recommend that would-be litigants take out insurance to cover such an eventuality, although this is ultimately the client's decision. The cost of the one-off premium varies enormously depending on the scale of the proposed litigation and the likely costs involved.

More importantly, a solicitor will only accept a case on the basis of a no-win, no-fee arrangement if he or she thinks it has a good chance of success. Ruth Collard, another partner at Carter-Ruck who acted for Helen Brinton in her claim, says that there are no hard and fast rules for establishing the likelihood of success. Much will therefore hang on the judgement of the solicitor. But one thing is certain, the greater the risk for the lawyer, the higher the success fee is likely to be.

Although the extension of CFAs may encourage litigation - Ruth Collard reports a tenfold increase in inquiries since the launch of their scheme - the Law Society insists that it is still a far cry from the situation in the US, where lawyers can take a slice of their client's winnings. Known as a contingency fee agreement, it is unlawful in this country, even if a client wants to proceed on that basis.

As to what the impact of CFAs on defendants is likely to be, Tom Crone, a lawyer for The Sun, says it will be negligible.

"We get libel claims all the time. We don't publish articles thinking that they might provoke a possible claim. We try to get it right, but when we don't, we say sorry and quickly retract what we wrote. Just as we did in the Helen Brinton case."

Although CFAs are unlikely to produce an explosion of litigation, US- style, the attraction of no-win, no-fee agreements will undoubtedly encourage litigants who might otherwise have let the matter drop. Which is good news for lawyers and bad news for the defendants, whoever they may be.