Can you afford to lose?

No one could dispute that there is a crisis over access to our civil justice system. At the root of the problem is the cut in availability of legal aid and cost of litigation. Conditional fees are acclaimed as a significant solution but the access they provide may prove to be a perilous route.

The Lord Chancellor's "no win, no fee" proposals maintain the risk that the damages obtained may be wholly absorbed by legal charges. The Law Society will encourage its members to apply a voluntary cap, but a system that guaranteed a minimum result for the client would have been significantly preferable.

The new proposals will not, as many assume, be the US-style payment by results, while the potential will remain for a less competent lawyer to spend an inordinate amount of time achieving an inadequate result and yet be compensated handsomely. For the Lord Chancellor has linked the success fee payable by those who use "no win, no fee" not to the result achieved, but simply to the fact of a result.

This is peculiar, given that it is known that in the field of personal injury claims, which he uses as his test-bed, the rate of success is in any event exceptionally high. Under the US contingency fee system, the lawyer and client have a more obvious interest in the achievement of the maximum amount of damages in the shortest time at the least cost, because to do anything else diminishes the return for both client and lawyer. True, there are ethical problems associated with the US approach but they are little different from those associated with the Lord Chancellor's conditional fee scheme.

In particular, the primary concern that the lawyer's interest in the result will diminish the lawyer's objectivity applies equally to both systems. The objections to either disappear completely if we have confidence in our lawyers, and in this country there has been and remains a proud and ingrained tradition of professional integrity.

Once the Lord Chancellor had decided to shelve the ethical concerns, his decision to opt for conditional, rather than contingency, fees remains puzzling. Despite the best efforts of the United State's insurance industry's publicity machine, any informed observer knows they do not lead to a litigation explosion. Contingency fees may have led to a few high-profile, apparently speculative, claims but that may be more a reflection of social attitudes and values in the US than the system of contingency fees.

More importantly, contingency fees are easily regulated. Most states find no difficulty in imposing a cap - acceptable to lawyers and clients - on the maximum percentage of damages that can be taken in lawyers' fees. The Lord Chancellor's decision not to follow the US is the more puzzling when it is remembered that the concept of conditional fees comes from his native Scotland where "no win, no fee" has never been prohibited yet it has never been seen as a significant access route to justice.

If access to justice is what "no win, no fee" is about, contingency fees would appear to offer an altogether safer path than the uncertain stepping stone of conditional fees.

But the debate on "no win, no fee" obscures the real issue, which is the need to control the cost of litigation. The truth is not simply that parties cannot afford to litigate, but more that they cannot afford to lose, for we maintain in this jurisdiction the enshrined principle that the loser pays both sides' costs.

The Law Society has recognised the importance of this problem by securing an insurance arrangement for those solicitors offering conditional fees who are members of its specialist Personal Injury Panel which will protect their client if the case is lost. But few solicitors are members of this panel and awareness of the specialism that it represents has no doubt persuaded the insurer that the risk is commercially viable, at least in the short term.

If "no win, no fee" is to be extended beyond the personal injury test- bed into the wider disputes arena, the prospect of costs indemnity insurance being available will reduce, and the risk of losing will remain a obstacle to "no win, no fee" providing greater access to justice.

The author is a personal injury specialist and partner in the solicitors Russell Jones and Walker.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Suggested Topics
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

    Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

    £50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

    Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

    £13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

    Ashdown Group: Training Programme Manager - City, London

    £40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

    Day In a Page

    Timeless drama of Championship race in league of its own - Michael Calvin

    Michael Calvin's Last Word

    Timeless drama of Championship race in league of its own
    Where the spooks get their coffee fix: The busiest Starbucks in the US is also the most secretive

    The secret CIA Starbucks

    The coffee shop is deep inside the agency's forested Virginia compound
    Revealed: How the Establishment closed ranks over fallout from Loch Ness Monster 'sighting'

    How the Establishment closed ranks over fallout from Nessie 'sighting'

    The Natural History Museum's chief scientist was dismissed for declaring he had found the monster
    One million Britons using food banks, according to Trussell Trust

    One million Britons using food banks

    Huge surge in number of families dependent on emergency food aid
    Excavation at Italian cafe to fix rising damp unearths 2,500 years of history in 3,000 amazing objects

    2,500 years of history in 3,000 amazing objects

    Excavation at Italian cafe to fix rising damp unearths trove
    The Hubble Space Telescope's amazing journey, 25 years on

    The Hubble Space Telescope's amazing journey 25 years on

    The space telescope was seen as a costly flop on its first release
    Did Conservative peer Lord Ashcroft quit the House of Lords to become a non-dom?

    Did Lord Ashcroft quit the House of Lords to become a non-dom?

    A document seen by The Independent shows that a week after he resigned from the Lords he sold 350,000 shares in an American company - netting him $11.2m
    Apple's ethnic emojis are being used to make racist comments on social media

    Ethnic emojis used in racist comments

    They were intended to promote harmony, but have achieved the opposite
    Sir Kenneth Branagh interview: 'My bones are in the theatre'

    Sir Kenneth Branagh: 'My bones are in the theatre'

    The actor-turned-director’s new company will stage five plays from October – including works by Shakespeare and John Osborne
    The sloth is now the face (and furry body) of three big advertising campaigns

    The sloth is the face of three ad campaigns

    Priya Elan discovers why slow and sleepy wins the race for brands in need of a new image
    How to run a restaurant: As two newbies discovered, there's more to it than good food

    How to run a restaurant

    As two newbies discovered, there's more to it than good food
    Record Store Day: Remembering an era when buying and selling discs were labours of love

    Record Store Day: The vinyl countdown

    For Lois Pryce, working in a record shop was a dream job - until the bean counters ruined it
    Usher, Mary J Blige and Will.i.am to give free concert as part of the Global Poverty Project

    Mary J Blige and Will.i.am to give free concert

    The concert in Washington is part of the Global Citizen project, which aims to encourage young people to donate to charity
    10 best tote bags

    Accessorise with a stylish shopper this spring: 10 best tote bags

    We find carriers with room for all your essentials (and a bit more)
    Paul Scholes column: I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England

    Paul Scholes column

    I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England