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 ‘Press Gazette’ a number the rich and famous have taken advantage of the CFA scheme.

As reported in ‘The Times’, 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 – in fact the actual number of claims has fallen since ‘no win, no fee’ schemes were introduced. The complex legal and financial processes involved are often misunderstood and consumers are misled into thinking the system will be genuinely ‘no win, no fee’ but can often find that costs are hidden and unpredictable. Another criticism is that these deals can create “perverse incentives for the legal profession” 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: “No 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.”

Jack Straw has made his views clear. Addressing the Labour Conference in Manchester last week he said “I am concerned about …‘no win, no fee’ 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.”

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.

The Legal Services Commission has issued a press release to all Crime Contract holders regarding the recording of travel time in Police Station and Magistrates Court cases.

• From 1st July 2008, providers do not need to record travel time in police station cases unless those cases are classed as exceptional.
• From 1st July 2008, providers do not need to record travel time in magistrates court cases in the 16 main urban areas as this is already allowed for in the fee.

However…

1. Given that you don’t always know when a police station case is going exceptional and
2. You need to be watching all the costs of providing legal aid work very closely

we would advise iLaw users not to ditch the recording of this time just yet.

One of the most important things that iLaw can give you is a complete understanding of how much it costs your firm to provide legal aid work under contract. It helps you now with issues like forecasting cash flow / work in progress and forward planning and in the future when it comes to competitive tendering. All of this help needs good data from your team in the form of accurate time recording so hiding any costs will skew the quality of the information iLaw can give you. The most successful firms are those who are recording and monitoring the cost of everything as it enables them to make good business decisions in time. So use iLaw to its maximum and keep recording your time well.