Could A Contingent Legal Fund Bring An End To No Win No Fee

Questions are being asked about whether it is time to bring an end to the current no win no fee system being used to fund a large proportion of civil cases. Next week the Lord justice Jackson, the court of appeal judge will outline provisional proposals of his review on the costs of litigation. It is expected that among many things he will be urging a look into a possible new way to fund civil cases that could replace the current no win no fee system being used for a large proportion of civil cases.

One idea being put forward already is a self funding scheme that would pay the clients legal fees at the normal rate and then in return if the client was successful in their claim put some of the damages received back into the pot to help fund future civil cases. This is a similar idea to that of the contingent legal aid fund (claf) which has been floating around for the last 20 years. This in principle is a good idea and will most certainly put a stop to what many have been describing as extortionate legal fees, but many will still be able to make a claim with relative ease.

Guy Mansfield, QC, a former Bar chairman who has led the Bar policy group producing the latest proposal says that this proposal is different from the previous Calf idea. It would not, he insists, replace legal aid, rather it would sit alongside it; neither would it be a fund just for weak cases that no one else will take. "It would ensure that those who don't presently qualify for legal aid, such as sole traders or pensioners with some assets, can enforce their rights against deadbeat suppliers or nuisance neighbors'."

The legal landscape has changed since a claf was last proposed, he says, with big cuts in legal aid, a 'huge growth' in conditional fee arrangements (CFAs) and the emergence of third party litigation funders.

The biggest possible problem for implementing a claf system is that it may only be used for cases that are hopeless and no lawyer working under a no win no fee basis would be willing to take on the case. A possible solution suggested by the Mansfield Group is to revert back to the original system of conditional fee arrangements. This would see instead of the loser paying hefty insurance premiums to cover the success fees; claimants would pay their own legal fees. This would then mean that they would have real incentive to keep costs down.

Possibly sticking his neck out further, Mansfield says: "We could also go back to the original guidelines, by which lawyers did not charge more than 25 per cent uplift on their fees."

The discussion remains open as to just what could it would take to solve what is being dubbed the golden egg for many lawyers in the UK. The claf system is a perfectly viable option but running aside no win no fee arrangements it could be hard for lawyers to take on cases under a claf arrangement if it is only going to attract cases lawyers wouldn't take on under a no win no fee basis.

By: seamus

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