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

Justice and Access to Justice
The Civil Justice Council giving its verdict on the Government's
proposals said, "We are concerned that funding plans
appear to rely heavily on CFAs and insurance to fill significant
gaps in provision. Such assumptions are premature." 41
Certainly, the overall effect of making success fees and
insurance premiums recoverable will obviously be to increase
the cost of litigation for losing defendants—which, no doubt,
will be reflected soon enough in higher insurance premiums for
us all. It is equally predictable that the level of both success fees
and premiums for insurance policies to cover CFAs will rise,
which would have a further inflationary effect on the costs of
litigation and would, incidentally, bring solicitors undeserved
windfall profits from CFAs. 42 The loser will have the right to ask
for a review of the level of both the success fee and of the
premium, but it may not be easy to establish that the lawyer's
early estimate of risk was too high. Also, challenge of the level
of the success fee and of the insurance premium will in practice
generally not occur in cases that settle (as, of course, most do).
The overall impact of CFAs on the economics of litigation will
therefore be very great. Among the many wholly unpredictable
issues is to what extent changes in the pattern of funding
through the withdrawal of legal aid and the development of
CFAs will bring in new clients. 43
Another unpredictable feature of the new funding arrangements
under the Access to Justice Act is what impact will be
made by the new initiatives to be taken by the Community
Legal Service (CLS). 44 To judge from the emphasis it has given
them, the Government apparently regards these as very important.
The overwhelming bulk of CLS expenditure (of the order of
some £800 million) will obviously go, as before, in providing the
services of solicitors and barristers in private practice, above all
in family law matters—though now it will be under the new
contractual arrangements. Expenditure on the new initiatives
41 "The Community Legal Service: A Consultation Paper", LCD (May 1999), p. 8.
42 Research showed an average success fee in personal injury cases of 43 per cent
[op. cit., n. 39 above, at p. 57). Considering the risk of losing in personal injury
cases, this seems high. See further M.C. Hemsworth, "Conditional fee agreements
and litigation funding", New Law Journal, November 5, 1999, p. 1660.
43 The first published research on CFAs said, "The results of this survey do not
give a firm answer to this question." (Yarrow, op. cit., n. 39 above, at p. 91.)
44 The LCD's Consultation Paper on the CLS of May 1999 must be read together
with the Legal Aid Board's Response of September 1999. Information on
developments can also be found on the Community Legal Service website.
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