HAMLYN - College of Social Sciences and International Studies ...

Justice and Access to Justice
A person unable to get state funded legal services, and not
rich enough to afford to fund the case himself, may now look to
finance his case by way of a conditional fee or "no win—no fee"
agreement, under which the solicitor agrees that if the case is
lost he will not charge the client, whereas if it is won he will
charge a success fee calculated as a percentage of his costs.
Under a conditional fee agreement (CFA), if the client wins the
case, his solicitor gets his normal fees paid by the loser. On top
of that he can charge his own client the agreed success fee
which can be anything up to 100 per cent of his costs—subject to
the proviso that the Law Society recommends that the lawyer
should not take more than 25 per cent of the client's damages.
(It is not clear whether this 25 per cent cap will survive.)
CFAs, which have been allowed only since 1995, have been
used mainly for personal injury cases. Solicitor members of the
Law Society's Personal Injury Panel, for what at least started as
a modest premium, could additionally offer their clients insurance
cover against the risk of losing and therefore having to pay
the other side's costs. 35 Recently the premiums have gone up
sharply and are no longer quite so attractive. 36
When Lord Irvine announced in 1997 that legal aid was to be
withdrawn from personal injury cases and that claimants would
instead have to look for funding to conditional fee agreements,
the critics pointed to the danger that some claimants would not
be able to find a solicitor willing to take their case on a
conditional fee basis or, alternatively, that the insurance premium
to cover the risk of losing might be prohibitively high.
The Lord Chancellor contended that viable cases would find a
willing solicitor and that the insurance industry would market
after-the-event insurance policies at sensible premiums to cater
for most viable cases. The critics accused him of being naively
over-optimistic. However, Lord Irvine then came forward with
an unexpected response to the problem. The Access to Justice
Act 1999 provides that both the success fee and the insurance
premium paid to cover the risk of losing are recoverable by the
35 In 1995, the premium was £85 for all claims. Subsequently the cost rose
slightly for road traffic cases and rather more for other claims.
36 The rise was from £92 to £148 for road traffic cases and from £155 to £315 for
other claims. See Law Society's Gazette, October 13, 1999, p. 1.
16