Conditional Fee Agreements, also known as ‘no win, no fee’, are alternative methods of funding litigation, introduced widely in 2000 when legal aid for personal injury claims was axed. In this type of funding the solicitors share the risk in that if a case is lost the solicitor will not be paid but if the case is won the solicitor will charge a success fee.
CFAs can be used in all civil litigation except for family cases and provide access to justice for those who could not afford to pursue litigation and who are not eligible for public funding. But according to â€˜Press Gazetteâ€™ a number the rich and famous have taken advantage of the CFA scheme.
As reported in â€˜The Timesâ€™, organisations such as Citizens Advice Bureau have been urging a review of the scheme, saying that it is not widening access to justice in the way intended â€“ in fact the actual number of claims has fallen since â€˜no win, no feeâ€™ schemes were introduced. The complex legal and financial processes involved are often misunderstood and consumers are misled into thinking the system will be genuinely â€˜no win, no feeâ€™ but can often find that costs are hidden and unpredictable. Another criticism is that these deals can create â€œperverse incentives for the legal professionâ€ and encourage the cherry-picking of high-value cases with a good chance of success, leaving the smaller claims.
The Ministry of Justice has commissioned a review of the arrangements in England and Wales. Justice Minister Bridget Prentice said: â€œNo win, no fee arrangements are vital in helping to give the public a voice in courts. However, we are aware of growing concerns that they may not always be operating in the interests of access to justice. We feel that now is the appropriate time for a comprehensive, objective and evidence based examination of the operation of no win, no fee arrangements in relation to personal injury, employment and defamation cases.â€
Jack Straw has made his views clear. Addressing the Labour Conference in Manchester last week he said â€œI am concerned about â€¦â€˜no win, no feeâ€™ arrangements. It’s claimed they have provided greater access to justice, but the behaviour of some lawyers in ramping up their fees in these cases is nothing short of scandalous. So I am going to address this and consider whether to cap more tightly the level of success fees that lawyers can charge.â€
The review is being led by Professor Richard Moorhead, Deputy Head of Cardiff Law School. He is due to report to ministers in the autumn.