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Will a Contingent fund replace Conditional Fees?

Sunday 26 April 2009 at 9:10 am | In News | Post Comment

Lord Justice Jackson, the Court of Appeal judge, is currently conducting a review on the costs of litigation.

The Bar Council of England and Wales has submitted a policy paper proposing a Contingent legal aid fund (Claf) scheme that would pay the client’s lawyers at ordinary rates. The winning claimant would put a proportion of his damages back into a pot to fund future cases.

Clafs have been suggested before, but the current proposal is not to replace legal aid but run alongside it and would ensure that those who don’t presently qualify for legal aid, such as sole traders or pensioners with some assets, can obtain access to the courts. A stumbling block is that a Claf would be seen as a last resort for hopeless cases.

There is concern about the way that some CFAs base lawyers’ fees on the final sums incurred and so the lawyer has no incentive to minimise cost; uplifts of 100% are now common compared with original guidelines of no more than a 25%. The solution is for claimants would pay their own lawyers’ fees.  They would then have a real incentive to keep costs down.

Huge fees are paid by insurance companies and then ultimately by the public, through premiums. A Claf fund would be run as a non-profit-making mutual fund. It would be managed by professional insurers. Institutional defendants, such as the NHS pay excessive fees, because a client who is funded by the CFA is not at risk of costs.

http://www.judiciary.gov.uk/about_judiciary/cost-review/index.htm