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Where are we now on Conditional Fees? – or why this Emperor is Wearing Few, if any, Clothes
Author(s) -
Zander Michael
Publication year - 2002
Publication title -
the modern law review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.37
H-Index - 22
eISSN - 1468-2230
pISSN - 0026-7961
DOI - 10.1111/1468-2230.00416
Subject(s) - emperor , clothing , citation , history , law , political science , ancient history
Conditional fees were first introduced by the Thatcher Government in the Courts and Legal Services Act 1990, though it took another five years before they became operational. Under the legislationl and the regulations2 it became lawful for a solicitor to agree with his client that in the event that the case was won he could charge the client a success fee (sometimes called 'uplift') of up to 100 per cent of his costs. The legislation legitimated 'no win, no fee' (or 'win and I charge you more') arrangements that would otherwise have been unlawful as contrary to the fundamental rule banning any arrangement that made the lawyer's fee dependent on the outcome of the litigation. If one considers just the case itself, the success fee is pure prof1t. But success fees must also cover the losses incurred in the very small minority of cases that are unsuccessful.3 To support this new form of funding of civil litigation the insurance industry started to develop products to enable the claimant to cover himself against the risk of losing and having to pay the other side's costs. And then to cap it all, in 1999 Lord Irvine's Access to Justice Act made both the success fee4 and the insurance premium5 recoverable by the successful litigant. (The writer has described the whole story and its implications elsewhere.6) Callery v Gray7 was the first case concerning conditional fees to reach the House of Lords. The law lords were told that there were some 150,000 cases awaiting the outcome! Leave to appeal had been refused by the Court of Appeal. It was granted by the House of Lords presumably so that it could provide general guidance to everyone involved in conditional fee arrangements (CFAs). In the event, however, the law lords decision answered little or nothing and gave no general guidance provoking the question, why did it give leave? The case arose out of a straightforward claim for damages in respect of minor injuries suffered in a road accident. At his first meeting with his solicitors the claimant C entered into a CFA which provided for a success fee of 60 per cent. A