For anyone who has been injured as a result of someone else’s negligence or fault, the option has always remained open to them to pursue a claim for compensation. The advent of conditional fee arrangements or CFAs (more commonly known as ‘no win, no fee’) litigation has meant that far more accident victims have been able to claim recompense for a range of effects including loss of earnings, the cost of medical care and even ‘emotional trauma’.
But the no win, no fee system has been fraught with problems, and it seems that these problems are coming to a head after almost continuous press headlines revealing the disproportionate level of fees charged by some solicitors.
Success fees – successful for whom?
The biggest bone of contention has been the ‘success fee’ that many solicitors charge on CFAs. In some cases, success fees have been up to half the amount of the final compensation settlement and in a few rare instances, 100% of the amount. The other issue that has observers up in arms is the extortionate fees that some solicitors charge for their services. One instance quoted a £2,000 compensation settlement being eclipsed by the £100,000 legal fee charged by the solicitors.
It is easy to quote extremes to add fuel to the argument that the claims system is becoming riddled with greed. But those involved in the industry also point out that many solicitors take on no win, no fee claims because they genuinely believe that the system offers those who are financially unable to pay for their own legal fees the opportunity to get justice through the courts. Taking away the CFA option would leave many accident or medical negligence claims victims powerless to pursue the case through the courts. “The claims system is working,” explains Paul Breen of claims specialists Serious Law. “There is no doubt that it gives ordinary people the chance to claim for compensation that is rightfully theirs and, in the case of serious accidents that result in spinal or head injuries for example, so desperately need. But what is evident is that some aspects of the system are clearly being abused by a very small minority of solicitors. Unfortunately, whenever the press talk about the claims system, it is these cases that grab the headlines,” he continues.
Matters have come to a head with the publication of Lord Justice Jackson’s recommendations and review on the cost of litigation, and the Justice Secretary Jack Straw’s announcement that the success fees charged by solicitors in libel cases must be cut by at least 10%. This may mean that solicitors will be less willing to take on CFAs as they see their fees cut dramatically. “It is effectively giving solicitors a pay cut,” says Paul of Serious Law. “While this may serve to placate a baying media who have been fed a constant supply of scandalous fees stories, the ordinary claims solicitors working for far less could also be affected by sweeping, generalised measures introduced as a knee-jerk reaction by the Government,” he comments. “If we’re not careful, we could see the collapse of the no win, no fee system completely. And that would put thousands of ordinary accident victims at a severe disadvantage,” he concludes.
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