A Lord Chancellor's Department Consultation Paper

Access to Justice with Conditional Fees

March 1998


Response by Jeffery

Michael Fletcher

Solicitor of the Supreme Court of Judicature

J.M. Fletcher & Co

Solicitors

374 High Street

Winsford

Cheshire

01606 556322/556324
18th March 1998

1. THE WAY AHEAD
Making Modernisation Happen
2. EXTENDING CONDITIONAL FEES
What are conditional fees?
The case for extending conditional fees more widely
Monitoring
Other Issues
3. MODERNISING LEGAL AID
The Need to Modernise
Housing claims
Judicial Review
Defendants
Medical Negligence
Targeting Legal Aid Provision
Transitional Arrangements
4. OTHER FUNDING MECHANISMS
The Bar and Law Society Proposals
Legal Expenses Insurance
Membership Litigation Schemes
5. CONCLUSION AND SUMMARY OF QUESTIONS


1. THE WAY AHEAD

RESPONSE 1.The Way Ahead?

1.1. Justice should be there for all of us, when we need it. It should not be just for the wealthy or those on the very lowest incomes. But justice always has a cost, in time and money, and we also want to encourage fair settlements of disputes before they go

to court, whenever possible. We do not want to create a litigious society but one in which people respect one another's rights.

1.1

How will the removal of legal aid increase access of justice to all. Is there some sort perverse logic which says that because the citizen can have a lawyer representing him against a huge corporation which already has a lawyer this takes away his right to justice

1.2. The present civil justice system falls woefully short of this ideal. It is too complex, takes too long to deal with cases and it is too costly. The number of people entitled to legal aid has gone down. A huge swathe of ordinary people on modest incomes are deterred from starting a legal action by the potential costs of litigation - their own costs, and the risk of ending up paying the costs of the other side. That is why the Government has embarked on a programme of wide ranging reform of the system to make it quicker, simpler and more certain. 1.2

It is unfortunately the nature of the beast that argument is complex and in my experience it is the defendant lawyers who have developed a culture of arrogance that they believe they can beat the legal aid system which has been weakened as a result. There appears to be an unfortunate attitude that has developed that the citizen simply does not deserve the ability to take on large corporations.

If the large corporations and their advisors chose to stall and delay the inevitable (at present so long as legal aid exists) then that is their problem.

1.3. The current system does not encourage lawyers - who are paid the same, win, lose or draw - to weed out weak cases. This means that too many people undergo the strain of lengthy legal disputes for nothing. 1.3

In fact this is out of date there has been a considerable enhancement since 1994 to win because firstly the specified legal aid rates (£65 per hour) have not increased whilst the approved rates court by court have (currently £75 per hour) and secondly there was built into the specified rate system an exclusion 50% mark up so that to win will produce £112.50 per hour as opposed to £65 per hour which means there is a substantial incentive to win for personal financial gain for the plaintiff lawyer. I find it staggering that in a matter of such fundamental importance as this that such a basic matter as this could be either misrepresented or misunderstood.

In any case there I believe that to assume that Plaintiff lawyers are simply motivated by their own personal greed is entirely unfair and inaccurate they do have clients who they cannot ignore because they would not have them very long if they do.

At the moment the client still has the right to select his own lawyer which generally he does on the basis of results. It hasn't quite reached the stage where in a democracy the government through its agency (The Legal Aid Board) has selected/nominated the lawyer to represent the client on the basis of "administrative quality control" as opposed to "results quality control". This simply means that the Plaintiff solicitor cannot ignore his lay client and the position would be much improved if the client was paying a small contribution towards his case.

In my experience the problem has been the Defendant lawyers who appear to have the capacity to waste the insurer's monies stalling rather than settling perhaps it's because those responsible for spending the money are not spending their own money.

By way of example a few years ago I had two P.I. claims running at the same time one insurer accepted liability straight away and did not instruct lawyers. They even paid for operations to speed up the claim which unfortunately didn't succeed but they paid £50,000 damages and £6000 costs. The other company instructed lawyers defended everything to the door of the court lost numerous interlocutory applications in their delaying tactics and on the eve of trial paid £30,000 damages and £25,000 plaintiff's costs with no doubt a similar sum to their own experts and lawyers (£25,000).

This meant that the first claim cost a total of £56,000 and the citizen received £50,000 compensation and the second claim cost £80,000 and the citizen received £30,000 in neither case which were both supported by legal aid did it cost the government anything in net terms although they did support the expenses on an underwriting basis

1.4. At the same time the cost of the Legal Aid Fund goes up and up. Net expenditure in 1990-91 was £682 million. Only six years later, expenditure had more than doubled to £1,477 million. That is an increase of 115%. On civil alone the cost has almost tripled (see paragraph 3.3). 1.4

The statistics are short of details as to how much the net cost is attributable to the specific proposed categories which are intended to be removed cost.

That is how much of the budget relates to money only claims and in particular Personal injury claims.

One of the ways which would save money and speed up the processing of litigation would be to streamline and bring into the 20th century the legal cost assessment process not necessarily by imposing fixed costs but getting rid of the ancient "four column bill" procedure and replace it with a schedule system which could be produced in standard spreadsheet format and could therefore be calculated in seconds and the adjustments could be seen.

Indeed the new Legal Aid Board Claim 1 form is a major improvement on assessment of costs by the board and it could be adapted to improve and simplify the taxation (assessment of costs) procedure. The present approach is I submit self defeating that is an over enthusiastic detailed investigation which results in additional costs (which have to be found somewhere) and even more delay which both have impact upon the citizen who doesn't receive his compensation and may end up having to pay some of the costs of the case that he wins.

1.5. This Government was elected with a modernising agenda, and there could be no clearer case for radical reform than Legal Aid. When it was set up 50 years ago, it was a great step forward. It brought the opportunity of access to justice within the reach of the majority of the population. Now it is failing the people it was supposed to help, and stands in the way of the modernisation of the legal profession and the justice system as a whole. 1.5

I fail to see how to "remove and reduce" the scope of legal aid can realistically be called a "modernisation" it is simply a withdrawal. It may or may not be failing the people which is a matter of debate but it will absolutely fail if it doesn't exist.

1.6. That is why the Lord Chancellor, Lord Irvine, has announced a radical programme of reform to achieve change. The programme will be delivered in two stages. This paper looks at the first stage. The Government intends to:
  • Promote access to justice for the majority of the population in England and Wales through the wider availability of conditional fee agreements.
    This will make access to the courts a reality for the majority of the population of England and Wales. Conditional fees ensure that the risks of litigation are shared between the lawyer and the client: clients do not pay their lawyers fees unless they win; and lawyers, when they win, receive a level of fees that recognises the risk they have taken. Lawyers are better placed to know the strength of a case and how to deliver the most successful outcome. We know that conditional fees work: already, over thirty thousand people have used them to bring claims.













































  • Refocus legal aid by removing cases which can be financed in some other way and promoting access to justice for the needy by directing the legal aid budget to priority areas.
    This will allow the Government ultimately to concentrate publicly funded support on legal services towards helping people secure their basic rights such as a decent home, appropriate social security benefits and challenging officialdom through judicial review, and towards assisting cases that raise issues of wider public interest. The present system does not allow the Government to do this. It allows no assessment of the importance of classes of cases or any way of targeting help towards priority needs. The Government simply pays for the amount and type of legal services that lawyers wish to provide.
1.6



  • Where is the sharing on a "no win no fee basis" The lawyers are apparently being told to provide the support to the citizen that the government is withdrawing. They are in fact telling lawyers how to run their businesses at the same time as dodging responsibility of one of the fundamental purposes of a government that is providing a justice system for the benefit of all.
    It is not appropriate to rely on the statistics of the number of policies as an indication of he success of the scheme. It certainly is wise to protect the citizen from personal risk of costs liability in such circumstances and in realty there is no measure of how many cases would have been run anyway without that protection previously.
    There has been a problem with the implications of the indemnity principal where the citizen has suffered an obvious injustice but can't obtain legal aid so that he has to commit himself to the obligation to pay substantial liabilities of costs which are increased because the Defendant runs the costs up using delaying tactics and "bank rolls" the case. The risk is that at the end of the case the Defendant starts trying to investigate the reality of the citizen's obligation to pay his lawyer win or lose. If there is no such commitment the defendant cries foul and the Plaintiff lawyer doesn't get paid. The reality is however that for years Plaintiff lawyers have been doing a lot of work for "private clients" on the basis that the receive payments from their clients to cover the cost of disbursements with perhaps a small payment on account towards the lawyers fees if the claim is a big one but generally the Plaintiff Lawyer has awaited the conclusion of the case and the defendant's payment before he expects payment. The lawyer therefore has simply risked the realty that the citizen may lose and may not physically have the money to pay him especially as prior to insurance the defendant could theoretically be responsible to pay his opponents costs.
    The insurance schemes are not however without difficulty in the so called "no win no fee" environment is that now not only can the defendant lawyers supported by multinational corporations stall the settlement they will actually be paid for doing so if the matter doesn't proceed whether it is withdrawn lost or struck out for failure to proceed so they now have a bonus incentive to delay as well, whilst the plaintiff lawyer is in the most vulnerable position even more than his client which in many cases will mean that he will be in conflict with his client and may for example be forced to settle on inappropriate terms to ensure that he gets something out of the litigation
  • How will the removal of underwriting support to the part of the legal aid system that costs the government virtually nothing (indeed probably makes a "profit" if the recovery of state benefits is taken into account) but in reality subsidises (because it is more profitable see point 4.3) the solicitors offices to enable them to exist increase resources available to carry out the social work legal aid aspects which at the moment are not provided at actual cost and the government is apparently looking to partly charity funded providers as an alternative.
    The result will simply be that there will be more pressure to increase the monies payable from the Legal aid board for the "social" legal work which the government apparently wants to promote or the essential network of small and medium sized solicitors offices will simply close just as many did that didn't adapt when the free market was let loose on the conveyancing industry.
  • I simply do not accept that the government does not have power to target to "priority" cases in fact a large percentage of time is presently spent on restricting legal aid and if they truly wanted to the government has the power to relax the controls in the areas that they say they want to encourage indeed the two areas quoted remain very restricted there is no legal aid for tribunals and until such procedures have been exhausted Judicial Review is not a matter for consideration. As to housing it remains one of the most restricted and controlled areas for legal aid. Unless there is a clear point of law it is very difficult to obtain legal aid to respond to for example possession proceedings.
1.7. In the longer term the Government will seek to:
  • Deliver legal aid through contracts, to provide the right help in the right place at a price which delivers good value for money.
    In future, all legal aid work, whether civil or criminal cases, will be restricted to providers of legal services who have a contract with the Legal Aid Board. This will allow better control through the Board agreeing the price to be paid in advance for the majority of cases. Contracting will allow the Government to get the most for the money that is spent and to spend it on those cases which most need it.
























  • Remove weak cases from the legal aid system by toughening the legal merits test so that only cases with a strong prospect of success are supported with taxpayers money.
    Too many weak cases are granted legal aid. The hopes of litigants are unrealistically raised, and the opposing party is exposed to unnecessary costs which they cannot recover. There should be a strong prospect of success before legal aid can be granted. The test should reflect the priority of different types of case, and take account of the need for the legal aid budget to deliver as much help as it can with the taxpayers' money it has to spend.







  • Develop a way of supporting cases which have a significant wider public interest but which might otherwise not be brought.
    There may be some cases where the benefit to the individual is small, or for some other reason the individual may not qualify for legal aid, but there is a significant wider public interest that the case be supported with public funds. The Government wishes to consider how this can be achieved.
  • Establish a Community Legal Service
    The Community Legal Service will vary from area to area according to local needs. The principle will be to provide effective mechanisms to enable the socially excluded and economically disadvantaged to enforce the legal rights which substantially influence their lives, such as housing, welfare, consumer and employment rights.
1.7
  • This is one of the fundamental areas which I believe has not been understood and is being ignored. There is a significant constitutional difference between the legal profession and say the medical profession. In a democracy it is entirely inappropriate for a state to directly control a legal profession, a citizen must be able to choose his legal advisor and not have him selected by the state the "contract" is with the client not with the government or its agency.
    There already are considerable controls in place restraining costs it is already recognised in the consultation paper that there is more lucrative work available see 1.11 and yet they do the work. Since the Legal Aid Board was created to administer legal aid in substitution to Law Society the have steadily taken steps to take control and yet the costs have apparently rapidly increased during the same period whether it is a coincidence or not it is the case that all the changes that have been introduced have clearly had little to no effect and what is now proposed is affecting the fundamental right of the citizen to choose.
    Indeed whilst we are only currently talking about civil legal I notice that in Sir Peter Middleton's report he was advocating competitive contracts being negotiated for the defence of the large "fraud" trials this I believe is an entirely inappropriate intervention in the citizen's right of choice it cannot be right to impose legal representatives on a citizen in such a manner. (And in criticising the defence costs has there been an open disclosure of the prosecution cost)
  • The weak cases are already removed at a very early stage. The present proposals are apparently principally to remove Personal Injury Claims even though it is accepted in this paper that these claims have high success rate see 4.3 . Percentage of success rates have to be highly subjective. If matters were so certain as to the outcome there wouldn't be any litigation at all. The suggestion that the most successful and cost effective part of the legal aid system should be removed to strengthen the rest of the system is simply illogical. Indeed to apply the test literally might mean that having removed the most effective part of the system the rest should go on the basis that it would not be likely to achieve a high prospect of success. However it is not necessarily appropriate to measure matters on the basis of who may may not "win" often the best and most cost effective result is a compromise.
    The short question is what are the precise statistics of the cases which fall in the categories which are proposed for removal.
  • There are plenty of cases of principle and yours is of course the one that needs to be aired if you happen to be involved.






  • As to a community legal service what is proposed is a state legal service by another name supported in part by charity. This is not new there have been for many years legal advice centres but the simple fact is that they cannot survive even with receipts form the "Green Form System" (Sorry Claim 10) and have to have a subsidy from either local authorities or elsewhere. In simple terms the payments for doing nothing but "social welfare " legal work simply are inadequate to pay the overheads of the provision let alone make a sufficient profit to make a living.. Accordingly if you wish to set up a free standing service to provide for the bottomless pit of "social welfare" legal work then it will cost a fortune and it makes no sense to remove the element that subsidises the system, provides a "profit" for the government and provides justice for the citizen.

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Making Modernisation Happen

1.8. . This is our radical vision for a modern and fair system. It will require primary legislation to bring about fully. It also requires lawyers to adapt to new ways of doing business and to change the financial basis on which their firms or practices are structured. It requires a partnership between the Government, the taxpayer, lawyers, insurers and financial institutions to fashion a new culture for meeting legal costs. The Government wishes to encourage a wider use of legal expenses insurance, and a wider range of after-the-event insurance products. It wishes also to assist the legal profession, insurers, banks and other financial institutions to help lawyers to take cases on a conditional fee basis, where appropriate, regardless of the financial standing of the client. We also want to discuss with trade unions and others how we can help them to buy more services on behalf of members and their families. It is an ambitious programme, but nothing less than a modern country deserves. 1.8

The reference is made to a "modern" system as if the present system is something old and out of date. There is also reference elsewhere to the Legal aid scheme being 50 years old. In fact in the scheme of things 50 years is an insignificant time scale indeed it is not even a lifetime it is in fact still a revolutionary system. The suggestion is to take it away and leave everything to the market. Commercial interests are not going to support anything unless there is a financial gain and the financially strongest will have the strongest clout. They are not interested in the fine words "of justice for all" indeed there is I believe a degree of resentment that the citizen with legal aid can actually take the might of the huge corporations on.

1.9. Access to justice is such a fundamental part of our democracy that rushing into a "big bang" would not be right. We have to make sure that extending access to justice brings benefits for everyone including those on low incomes who currently receive legal aid. But the prizes are so important that we should not delay either. We are setting deadlines for each stage of the programme of reform, so that all parties - lawyers, insurers, those who fund litigation through membership schemes and most importantly the public - have some certainty and can plan accordingly. 1.9

But if you make the lawyers more financially involved in the case to the extent that the food that they eat depends on the outcome (early or late) you'll place them in conflict with their own clients. To use the phrase "extending access to justice" assumes that the proposals will do so the question I ask is HOW?? The Law society and other groups appear to believe it will but I remain unconvinced and would be interested if somebody could provide a logical explanation of the mechanics of how such a conclusion can be reached as opposed to a statement which in a self fulfilling manner simply states the conclusion which happens to mean the government through its Legal aid board agency simply ceases to be involved (although I believe to the detriment of the state)

1.10. We plan a two stage approach. Much change can come through better use of existing systems, and existing legislation. This consultation paper shows how. We will aim, subject to consultation, to complete the extension of the availability of conditional fees, and to complete the first phase of refocusing legal aid by the middle of 1998. We also need to legislate to complete our reform package (including some of the changes to the law that are proposed in this paper) and we will be issuing a White Paper in the Summer this year to explain in more detail the vision set out above. Legislation will follow as soon as Parliamentary time can be found. 1.10

The closing date for this consultation papers the 30th April i.e. two months to the middle of the year which is of course the summer one assumes that before rushing into such radical proposals the government will consider the responses seriously.

1.11. In all our reforms, we aim to bring access to justice back to millions of ordinary people. But we will not ignore the strengths of the current system. Solicitors and barristers have their critics, and there are abuses of the current system, but equally many lawyers take on legal aid work even when more lucrative business is available. Others do work free for those who cannot pay for themselves, as a valuable public service. 1.11.

Its nice to know that solicitors are not totally rascally but no matter how much you might want to do work free you still have to live and pay for your staff at the end of the day unless you have a private income you simply cannot be a charity unless you have a private income and huge resources to pay your overheads.

1.12. We do not want to create a purely commercial legal profession, concerned only with the fast buck. We do not want to import "ambulance chasing", or to encourage litigiousness. 1.12

This is clearly a significant risk if you start messing about with the ancient doctrines of Maintenance and Champerty They do not exist for nothing.

1.13. Our aim is a fair and open legal system, where everyone is able to rely on the impartial advice of their legal advisers throughout the legal process, where people are neither sucked into expensive and heart rending litigation, nor prevented from seeking justice and redress by the fear of punitive legal costs. That is what our reforms will deliver. 1.13

Again there is a claimed conclusion ("That is what our reforms will deliver") with no apparent explanation as to how. On the contrary the minute the lawyer is more dependent personally than his client he ceases to be impartial. If clients don't want to be sucked into heart rending litigation why is it believed it is any easier for the lawyer In fact it is no fun for anybody certainly so far as anyone who is acting for a "human client" as opposed to an "abstract corporation" especially as the unique problem of the vulnerability of Legal aid lawyers has been judicially noticed in relation to the introduction of wasted costs orders (see Ridehalge v Horsefield etc.)

1.14.   1.14

Noted

1.15.   1.15

I would hope and wish that this response is published to the widest possible audience and I am more than happy that my name and identity be disclosed.


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2. EXTENDING CONDITIONAL FEES RESPONSE

2 Conditional fees (extension ?)

What are conditional fees?

2.1. Conditional fee agreements, also known as no-win-no-fee agreements, allow a lawyer to agree to take a case on the understanding that if the case is lost, he will not charge his client for the work he has done. If, however, the case is won, the lawyer is entitled to charge a success fee calculated as a percentage of his normal costs, to recompense him for the risk he has run of not being paid. Clients sometimes have to pay for the expenses, known as disbursements (medical or other expert reports, court fees or enquiry agent's fees) that the lawyer has had to pay, although in some cases the lawyer may agree to fund these costs as well as part of the agreement. Conditional fees allow lawyers and clients to share the risk of litigation. The success fee is set according to the risk the lawyer is taking. The higher the chance of winning, the lower the success fee should be set, and vice versa. This helps to ensure that the risks are managed by those who are in the best position to know what the risks are - the lawyers. 2.1

If you strip away the catchy phrase "no win no fee" what do you have. A policy which is "passing the buck" to lawyers to provide the people with a justice system against huge multinational corporations which even the government wants to shy away from. There is no sharing of risk its a "give away something for nothing" marketing exercise but will not provide justice.

Who decides how to set the % risk or is that something which will be hawked round on a competitive tendering basis.

The simple truth is the lawyers even the biggest do not have the resources to fight the large corporations especially with the retention of the insurance backed costs following the event system (a situation which does not subsist in America where a lot of the culture comes from).

The one good thing about the introduction of conditional fees is that the defendant can't avoid paying the costs of the successful Plaintiff because his lawyer has not secured a contract creating a liability upon a possible loss that the citizen Plaintiff simply does not have the ability to pay but his multinational corporate opponent can easily pay (the effects of the indemnity principle)

Note I recognise that much of the consultation paper is written in the style of a press handout which involves simple impressionable "sound bite" concepts as opposed to detailed analysis which are media attractive and I am trying to respond in a similar manner but the present point is technical and not immediately obvious however it needs to be acknowledged.

2.2. Lawyers working under a conditional fee agreement are likely to be more concerned to ensure that they do not take on cases where the chances of success are not sufficiently good. Conversely, in the cases that are taken on, the lawyer is encouraged to achieve a favourable outcome for his client to earn his success fee. The introduction of conditional fees is a significant step towards removing the barrier of high costs that deters so many people from starting legal proceedings however good their claims might be. To provide peace of mind against the possibility of having to pay his opponent's costs, a client can take out insurance to pay the opponent's costs, and the disbursements the client has paid his lawyer. As with disbursements, in some cases the lawyer may agree to meet the costs of the insurance premium. 2.2

The assessment of the likelihood of success is a highly subjective matter and as the amount at risk increases the ability to argue without resistance reduces.

After all if everything was so certain there would not be any litigation in the first place.

By way of example I recently acted by a client of moderate means who bought a modern house less than 20 years old on a housing estate with the aid of a mortgage from a large household name lender who arranged for the insurance and the survey (at the client's expense) in order to protect their security and when it became apparent to a purchaser's surveyor at the time of a prospective sale that there was a substantial slope (about 4.5") the insurers reaction was to stall and argue it was old movement and it must have been obvious at the time of the purchase about 5 years earlier and when this was put to the surveyors they said it wasn't obvious and the substantial movement all took place after the purchase. What was certain was that the client had not done anything wrong at the time of the purchase he had a survey and he had subsidence insurance. In fact the prospects of success from somebody from the clients view point in simple terms appeared to excellent but that did not stop the pressure of litigation and argument not to result in the client losing his employment and relying upon legal aid which eventually meant, that as there was no possibility whatsoever of any citizen funding a 10 day trial with numerous experts arguing what the cause of the problem was, he couldn't take up employment until the case was settled by which time the combined costs of the lawyers and experts for all three parties were about three times more than the value of the claim being about the value of the house.

The possibility of finding a lawyer to support litigation of this type through to the end without the support of legal aid is virtually nil. This is not an isolated problem in fact it is the reason why legal aid was introduced in the first place it has had the underwriting support of legal aid and having succeeded against both defendants the government will get all their money back.

As to the insurance point I have already indicated how these insurance schemes actually have the potential of increasing the vulnerability of citizen plaintiff lawyers see 1.6

2.3. Conditional fees were introduced by section 58 of the Courts and Legal Services Act 1990. The Act allowed the Lord Chancellor to make Orders specifying the proceedings in which agreements could lawfully be made i. The Act also specifically excluded certain proceedings (briefly summarised as criminal and family proceedings ii). 2.3

Whilst there is an indication that conditional fees have been introduced there has not been an explanation as to why they were not allowed in the first place and indeed were actually a criminal offence until relatively recently.

Basically as I understand the position it was felt the common law was set up to prevent the courts being swamped with arguments which were abstract and but remained arguable and meant that opponents were put to the trouble of responding to such arguments or alternatively paying up enabling lawyers and others to profit from semantic debates.

This is arguably one of the worst problems with the American system in that costs do not follow the event and the result is a highly litigious society which is certainly not cheap.

If however you allow open conditional fees with the retention of costs risks to prevent and explosion of unwarranted cases you risk the danger that the rich and powerful will have all the power and the access to justice for the ordinary citizen will be lost.

2.4. In 1995, the then Lord Chancellor, Lord Mackay of Clashfern, allowed conditional fee agreements for proceedings involving personal injury, insolvency and cases before the European Commission and the European Court of Human Rights iii. The maximum amount of success fee a lawyer was entitled to charge was set at 100% of the lawyer's normal fees for the work undertaken. The Lord Chancellor also made regulations under section 58 to specify the information a conditional fee agreement had to contain iv. 2.4

It is clearly impossible to have a "payment by results" system where money is not the issue and the results are probably a compromise anyway.

2.5. Since the introduction of conditional fees in 1995, the Law Society has produced guidance for solicitors about using conditional fees and a model agreement for use between clients and solicitors. It also advised solicitors to apply a voluntary limit on the proportion of damages that could be taken by the success fee. It suggested that this should not be more than 25%. The Law Society also arranged a scheme of insurance for clients against meeting their opponents costs in personal injury cases at modest premiums (currently ranging from £92-£155 exclusive of tax). By the end of 1997, when conditional fees had been available for some 30 months, around 34,000 policies had been issued, their use increasing as lawyers developed their expertise in this area. 2.5

All these statistics show is the number of policies which have been taken up for cases which would probably have been run without policies if they were not available see 1.6 ante


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The case for extending conditional fees more widely

2.6. It seems clear that conditional fees, once they become available, represent an avenue to access to justice that has not existed before. Maintaining the prohibition on their use in other areas of litigation, therefore, can be justified only where a greater harm to justice would be caused by allowing their use. Further, the harm caused to the delivery of justice must be greater than the harm of denying access to justice. It is important that people are able to obtain redress if, for example, they are caused harm, or if they buy goods or services that turn out to be poor quality, or if people do not honour contracts. The barrier of legal costs which dissuades many people from bringing or continuing with claims can be removed by using conditional fees. Consequently, the Government can see no good reason to continue to prohibit the wider use of conditional fee agreements. 2 2.6

Why is it clear that they are an avenue to justice which has not existed before. There has been no reason why lawyers since they have been allowed could not have proceeded with all their cases on such a basis and gained the "success fee" enhancement which is apparently so attractive that it will make lawyers provide such improved access to justice but all that has happened is that those who can't now have the benefit of legal aid because of the reduction in the scope have sensibly taken the precaution of taking out the costs protection insurance.

Where is the increased access. The only highly technical advantage is that the unsuccessful defendants can't now argue they don't have to pay their opponents costs because the terms of engagement of the successful Plaintiff lawyer were not clearly established and I don't believe it is necessary to bring in conditional fees to stamp out such an in appropriate practice.

The reality has been for years many plaintiff lawyers have operated on the basis of seeking payments on account of disbursements only and running the risk (whatever contractual position) of not actually being paid if the case was lost because it is simply impossible to receive monies from those who do not have it to pay you.

As matters have progressed in recent years it has become more and more necessary to establish the precise terms of engagement in writing including the provision of the so called highly complicated "client care letter" which in truth is in reality a "solicitor protection letter". But the side effect has been that the clients are clearly frightened of taking on legal costs that they simply cannot afford and if they don't the "failed defendants" start to want to look at the "client care letter" to avoid paying up.

This is not a fair exchange for the removal of legal aid and will not increase access to justice.

Certainly it will do nothing to increase access for the consumer quality controls mentioned there is still no money in those cases anyway and they generally fall in the "small claims" category anyway so that there will be no costs paid anyway. These matters are currently dealt with by the Local Authority trading standards departments whenever there is any merit.

2.7. The Government wishes, subject to this consultation, to allow conditional fee agreements to be entered into in any proceedings, save in the categories presently proscribed by statute, that is family and criminal cases. 2.7 & 2.8

The short answer is that I strongly believe that apart from preventing "failed defendants" from avoiding payment of the Plaintiff conditional fees should not be introduced in any litigation at all but certainly it is impossible where there is no money involvement and where the measure of success cannot be measured on a simple win or lose basis as often it is a matter of compromise.



2.8. Are there are any types of proceedings for which conditional fee agreements should not be all

owed; and, if so, why would these proceedings not be suitable for conditional fee agreements?

Ditto


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Monitoring

2.9. The Government acknowledges that some are opposed in principle to the notion of conditional or contingent fees. It was argued at the time of their introduction, that lawyers working under conditional fee agreements would look to their own financial interest ahead of their clients interest: that allowing success fees to be set at a maximum of 100% would mean that lawyers would quickly make the maximum the norm, and swallow up large parts of the money or damages that the client had recovered. 2.9

The proportion of the fee charged is not the only way that a lawyer is potentially in conflict with his client. If he has a huge overdraft and is about to go bankrupt he may just be prepared to settle the case early for a lower sum on the basis that his opponent pays all the costs which might with or without success fee be a significant sum but leave the Plaintiff client with very little. This is a particular problem (but by no means the only example) when dealing with multiparty group actions where the plaintiff lawyer representing numerous parties may settle each individual clients claim for very little in the hands of the actual client but receive in his hands considerable costs (he being one lawyer or firm there being perhaps thousands of citizen plaintiffs). In other words sell his clients out.

2.10. These fears have simply not been realised. Nearly all agreements follow the Law Society model agreement. In a recent study v three quarters of the cases studied had success fees of 50% or less, with the average uplift for all cases being only 43%. In 90% of cases the voluntary cap of 25% was applied. This evidence does not suggest that rapacious lawyers are seeking to take in fees large parts of the client's damages. It shows that they can balance their duty to their client with the need to ensure that their firm can make a profit on the work it undertakes. Moreover, both branches of the profession (solicitors and barristers) work within a strong code of ethics that are rigorously enforced by the self-regulating professional bodies. The Courts are also, able to scrutinise, and amend if necessary, success fees agreed in a conditional fee agreement, through the process known as taxation of costs vi. The regulatory supervision of the professional bodies and the Courts provide, in the Government's opinion, sufficient safeguards to prevent excesses. 2.10

Well its nice to know that lawyers are not all bad and that the basic opening (factually incorrect) analysis at para 1.3 ante of a picture that the present system is driven by the self interests of lawyers is not wholly a true one.

In fact all the policies show is that rather than place there clients at risk the lawyers have advised of a way to obtain protection against a potential risk and have placed themselves in arguably a worse position. These cases would I believe have progressed anyway with or without the policy.

The simple truth is that Plaintiff lawyers generally have "citizen clients" who they won't have if they do not produce results (not necessarily purely financial).

2.11. The Government is keen to ensure that conditional fees are made more widely available and that they develop to their fullest potential. As part of this, the Government believes it is necessary to monitor the introduction of conditional fee agreements in new areas of litigation, and to conduct some further work on cases presently proceeding under these agreements once sufficient numbers of cases have finished. This will enable the Government to identify quickly areas where changes to the law might be needed, or where corrective action may be required. 2.11 & 2.12

See 2.7 and 2.8 ante



2.12. What monitoring or other research ought to be undertaken and over what period. 2.11 & 2.12

See 2.7 and 2.8 ante


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Other Issues

2.13. The Government is committed to making conditional fees work in as many fields of litigation as possible. The extent to which lawyers, the insurance and banking industries have already developed, and are continuing to develop, the market in which conditional fees can operate suggests that in future the use of conditional fees will become commonplace. Consequently, the Government is keen to know whether any changes to current law (either directly affecting the provisions of the Courts and Legal Services Act 1990 or more generally), rules of court, practice or procedure might assist in the development and use of conditional fees. In particular, two specific proposals have been made during consultation so far on which views are sought. 2.13

This passage I believe demonstrates a significant cultural problem and shows that it appears to follow the principle that everything is measured in self gain and monetary terms. The reference to insurance and banking industries demonstrates I believe a view of a commission based view point.

I do not believe that the only measure of a justice system can be monetary but if it is the financially mighty will remain on top.

2.14. It has been argued that any insurance premium paid to protect against meeting an opponent's costs, and the success fee, should be recoverable against the losing party. It has been argued that the former is simply a disbursement and should be recoverable together with all other disbursements. More generally, it is argued that both types of cost are incurred directly because the loser has put the successful party to the cost of taking court proceedings, and that they should be recoverable in the same way that other costs are presently. It seems wrong that a successful party who without a conditional fee agreement might not have been able to bring their case is unable to recover all the lawyers costs that they have incurred. The losing party has caused the need for litigation and it could be argued that they should meet all the winners costs including the success fee. Allowing the litigant to recover his success fee from the losing party would enable him to keep all the damages or money he has been awarded by the court, making conditional fees more attractive. It may also encourage the use of no-win-no-fee agreements by those defending proceedings who would not generally have secured damages or money from which to meet a success fee. 2.14

Since apparently legal aid is going all monetary litigation is going to be funded by contingency fees of one type or another (either with partial payments on account or not) therefore in the long run either the other side will pay all the costs including the insurance and the success fee directly or the damages will apparently go up as in America.

I find it amazing that there is a suggestion that the concept of conditional fees is apparently suggested as the means of support for defendants who have not chosen to be sued are likely to be poor and will have to find a lawyer to stick his neck out to protect them.

2.15. If the success fee were recoverable from the losing side, it would be necessary to decide at what stage a litigant should be required to disclose the level of the success fee. Requiring the level of the success fee to be disclosed before the conclusion of a trial might encourage early settlements. Conversely, disclosing the level of the success fee at too early a stage might divulge too soon the estimated prospects of success. 2.15

The success fee is apparently still going to be controlled by taxation see point 2.10 main paper (an archaic system which is in need of desperate modernisation to save resources and costs) and surely the whole system will be subject to " market forces" if there is a complaint after the event then on the basis that costs follow the event the losing defendant can argue the success fee as no doubt it will the rest of the fees.

2.16. It might also be necessary to allow the losing party to challenge the level of the success fee agreed between the client and the lawyer. In the event of disagreement some mechanism would be needed to allow adjudication. The trial judge, or the judge seized of the case under the proposed case management and allocation procedures to be implemented next year, could make a decision when the case is tried, or if asked to approve a settlement, or when a settlement is in prospect save only on the question of costs. A decision at these stages would need to apply a broad brush approach of whether, in all the circumstances, the success fee was broadly reasonable. Alternatively, a more investigative approach, akin to taxation, might be used, although there would be the potential to generate satellite litigation which could prove costly. The Government would prefer the first approach. 2.16

You mean that the rest of the inter parte fees are not going to be argued about. I wish!!!. And in any event I thought the success fee was a % of the rest of the fees which may have to assessed (taxed) if they cannot be agreed.

2.17. The Government is, on the whole, minded to amend the present law vii to allow the success fee to be recoverable and, either by statute or changes to rules of court, to allow the insurance premium to be recovered as a disbursement. It is keen to learn whether these changes would be welcomed in making conditional fees more useful and attractive. 2.17

As I have said I believe it will happen anyway because the level of damages will with time increase to cover the extra fees.



2.18. What changes to the law might assist the development of conditional fees? 2.18

There shouldn't be conditional fees at all.

2.19. Should the success fee and any insurance premium be recoverable against the losing party? 2.19

If they exist yes. (They are now see 1.3 and so why shouldn't they in the future)

2.20. If the success fee was recoverable, when should a party disclose the success fee he has agreed with his lawyer? 2.20

Why does there need to be a change to improve the position of the opponent even more.

2.21. What rights should the party liable to meet the success fee have to question the basis on which it had been agreed? 2.21

The short answer is that the losing party will no doubt be arguing the liability to pay the main costs and so he might as well continue to argue as he does now the existing success fee.

2.22. How should any disagreement best be resolved? 2.22

There needs to be a radical improvement to the taxation system the over meticulous investigation and archaic bills need to be brought into the 20th century. The first step would be to have a simple standardised spreadsheet calculated bill.


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3. MODERNISING LEGAL AID

3.1. The Government wishes to modernise legal aid because:
  • the system is out of date;
  • it costs too much;






  • it covers only a small percentage of the population
  • it can be unfair in its effect on those who are sued by those helped with legal aid; and



  • it is not flexible enough to allow the Government to target help in priority areas.
3.1
  • Nothing can and will stand still it is still a revolutionary system and to restrict its scope is not modernisation it is its destruction
  • It always will whatever is paid. In fact it is extremely good value because the true cost of the social welfare element is not covered as it is cross subsidised by other legal work (it would cost far more as a free standing service because of the basic overhead charges) and the bit that is suggested to be removed is the bit that potentially makes a profit.
  • Yes there is a strong case for extending the access particularly in the area which is suggested should be removed.
  • It can be but they should be more sensible and accept there is a real liability early. Generally the opponents in money claims are multinational insurance companies and the purpose is to make the system fairer for the citizen.
  • The proposals will not change the situation it will make matters worse.


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The Need to Modernise

3.2. Legal Aid was brought in by a Labour Government in 1949 to meet the social and economic conditions of that time. The extent and costs of the scheme now operating would be unrecognisable to its founders. We need a system that is fit for the next century not the middle of the present one. It must be able to deliver help to those in poverty, who would otherwise be unable to enforce their rights, in a way that puts them on a level footing with the rest of the population, and in a way which allows the Government to prioritise and focus help properly. 3.2

They will be even more amazed by the proposals for change which in fact is going to strike at the fundamental purpose of the system that is to enable the citizen to take on huge multinational corporations with little to no expense to the state, leaving the state with the rump of "social legal work" to fund without any support of cross subsidised work.

3.3. Legal Aid expenditure has been rising at an unacceptable rate. Over the past seven years, the cost of civil and family legal aid has tripled to £671 million. The average cost for proceedings which received full civil legal aid in 1990/91 was £1,442. If those costs had grown in line with inflation that would represent £1,760 at 1997 prices. The actual average cost in 1996/97 was £2,684. This represents an increase of 53% above inflation or an average of 8% per year. While the cost of civil and family legal aid continued to rise last year, the number of acts of help it funded fell by about 39,000. We are spending more and more public money helping fewer and fewer people. 3.3

The statistics are short on details as I have already indicated at para 1.4 and the increase appears to have grown exponentially since the legal aid board took over administration of the system and has tried progressively to take more central control. But how much of the increase comes from increased burdens because of for example the extensive increase in family law work arising out of social changes and greater child care awareness which also produced the Children Act or the acknowledged need to provide payments on account to the legal profession if the if it wasn't going to die due to cash flow problems arising out of he need to have huge amounts of working to capital to support a business that takes years to be paid (lawyers do not have a vested interest in delay)

It is true that the proportion of the population benefiting from assistance has been reduced but that has been due directly to government policy for example because of the removal of a contribution system from the "Green Form Scheme" this has meant that only those who are on benefits or close to it can have the benefit of such advice and such a limitation was bound to reduce the number of acts of assistance but not necessarily the value of such acts.

At the same time the rates of payment to lawyers have simply been frozen for two years and even then the levels of increase have been nowhere near the rates of inflation or the levels of increase in overheads.

The legal profession is in such a poor state that recently when I considered the suitability of taking on a trainee I received in excess of 120 enquiries and I did not even advertise but simply indicated to the relevant training establishments that there was a possible place available.

3.4. The grant of a legal aid certificate can be a defining moment in the conduct of litigation. It carries with it support from an almost inexhaustible fund, and almost total protection from any liability to pay the opponent's costs if the assisted person loses the case. An unassisted opponent knows that it is far better to settle the case quickly and keep down legal costs than to fight the case, however good the merits may be. The high success rate achieved in cases supported by legal aid is in part due to the oppressive effect of the grant of legal aid. This has allowed cases to be successfully taken which would not have proceeded if the cases had been financed privately. The provision of costs protection was intended to protect the assisted person, who by definition is of few means, from being dissuaded from bringing cases by the fear of losing and meeting costs. It was envisaged as a necessary limitation on the rights of those who are sued by assisted persons to recover costs, in order that the needy can bring cases and enforce their rights. It was not intended to give assisted persons or the lawyers of assisted persons a tool to use in litigation to bring claims of doubtful merit which effectively blackmail defendants into submission. 3.4

The first point is that the legal aid system is now so rigorously controlled and limited it actually contributes to the costs problem because the huge multinational insurance company opponents appear to believe they can beat the system and the constant need to obtain approval at every stage of the proceedings not only causes delay but also increases costs.

Surely the whole purpose of legal aid was to provide the citizen with the opportunity to pursue a case which he would not otherwise as a private individual have been able to take on if not what is it there for.

This passage illustrates the resentment that the legal aid system enables the citizen to take on huge multinational corporation and the truth is that if it is removed the lawyers will not be able to provide the citizen with that facility and the huge corporations will win by default not because they are right.

There are a number of other interesting factors in this passage firstly there is an acknowledgment that the money only cases which are proposed to be removed produce a "high success" rate which means they cost the government virtually nothing and if you add the benefit recovery the state actually makes a "profit".

I find it a bit rich that the large corporation usually multinational defendants claim they only pay because they are blackmailed if the cases are of doubtful merit (this being an inexact subjective statement) that does not mean they have no merit and the best way to avoid expenditure is to pay money in proportion to the extent of that merit as early as possible, not to drag matters out and use the policy holder premiums or shareholder monies on a campaign to "bank roll" the dispute

3.5. In seeking to modernise the system, however, the Government is mindful of the lessons of the past. The legal aid scheme is so complex and covers such wide areas of litigation, that attempts to control one part of the scheme can often be seen to result in increased expenditure in other parts as lawyers ensure that they use new systems to maintain or maximise income. There is nothing improper in this. It is the natural business response. 3.5 & 3.6

This is where the economic realities of the legal profession and how they affect legal aid funding are almost grasped but not quite appreciated.

It was appreciated and indeed predicted in the highest offices in the land that to let market forces loose on domestic conveyancing to the point where it no longer makes a realistic profit was bound to put pressure on the socially essential but basically non profit making element of the justice system.

It is still the case and will remain to be the case that this work is carried out by the network of small to medium sized solicitors firms up and down the country.

In rough terms I would say that before the destruction of the conveyancing business about two thirds of a solicitors income came from conveyancing and perhaps one third from citizen legal aid supported litigation. But the work load proportion was probably the other way round or possibly about 50/50.

However since basic overheads were about two thirds of income this meant if one only did conveyancing work one covered overheads and made nothing to live on. But if you only did litigation work there was not even enough money to support the cost of overheads. (You can see the difference between estate agents and solicitors estate agents charges are a lot higher but they have roughly the same overheads to provide the outlet and so with the conveyancing slump they have whilst in the hands of huge corporations made massive losses because the did not have any source of income which did not rely on the conveyancing market)

It therefore made no sense to let market forces loose on the conveyancing system (which the government had no involvement in but indirectly gained subsidised assistance from) because this was bound one way or another to push up the government funded "social legal aid" budget.

The government is now about to make the same mistake, only this time more directly. They are going to remove the purest element of the legal aid system which costs the government nothing and arguably makes a profit for the government leaving behind an inadequately funded "social legal aid" budget to fund and either the budget will go up or the network of lawyers offices providing the service will die.

There is no prospect in the immediate future of the conveyancing charges increasing to realistic levels even if the market was buoyant. And the government's attempts to introduce competitive tendering into a desperate high street solicitors market will not prevent the problem.

The question is why does the government want to remove this part of the system do they believe the whining of the large multinational defendants who make a rod for their own back in not making reasonable offers of settlement early so that resources are not wasted on heavy legal costs but are directed to the real problem.

I have tried to argue the position from the perspective of the citizen because no service is entitled to exist without a purpose and have been reluctant to refer to specific the economics of the legal profession as it appears one is only interested in one's self but if the finance is not there the service won't be.

By way of further illustration however I enclose copies of data base generated graphs showing the make up of my firm by reference to the number of cases and by reference to income as can be seen the P.I. element is by far the highest in source of income but not in number of cases similarly conveyancing still forms a high proportion of the business in terms of numbers but not so much in income.

I have included similar graphs for my own workload where the position is even more dramatic.

I appreciate that taking numbers of cases is not necessarily a complete measure because it doesn't measure the importance of each case or the necessary volume of work but it does illustrate that money only claims and in particular P.I. claims generate "the icing on the cake" which supports the rest of the "social legal aid work" But I'm not saying that the plaintiff lawyer is stretching cases out just to make more money. It is my belief it has been the defendant lawyers who have been primarily responsible.

The fact is that the element of the social legal aid scheme simply does not provide adequate income to support legal service outlets whether provided by amateurs or qualified lawyers.

3.6. Moreover legal aid, with regular payments on account of final bills, and certainty of eventual payment, is an important source of cash flow. Revision to procedures, or the introduction of new ones, (for example on the introduction of the Children Act 1989) has also lead to longer and more complex litigation. Similarly, as income streams from private work have reduced or disappeared, lawyers have turned more to legal aid to maintain income. For example, spending on legal aid rose rapidly at the same time as solicitors' income fell when the conveyancing market declined in late 1980s and early 1990s. Ditto
3.7. The extension of the availability of conditional fees offers the opportunity for the Government to begin re-focusing legal aid. The Government intends to provide the right conditions in which the legal services market can provide legal advice and representation regardless of the financial standing of the client. It wishes to assist lawyers, with the help of insurers and bankers, to be able to take cases on a conditional fee basis without requiring clients to meet on-going costs. 3.7

It will do the opposite. If there is not enough money available to support the legal service outlets (solicitor offices or not) there will be no opportunity to provide any service and most of the time will be spent trying to stem the tide of increasing costs rather than actually addressing the problems the government says it wants to refocus on.

3.8. The reforms we plan will begin to redress the unfairness of the present legal aid system mentioned in paragraph 3.4. Lawyers who are sharing risks with clients will assess more carefully the merits of cases. Some weak cases presently brought under legal aid will not find lawyers who are willing to act. This is to be welcomed: the Government does not believe that weak cases should be brought using legal aid which would not be brought privately. Removing these cases will reduce the costs not only to the legal aid fund but to all defendants who presently face these speculative claims. 3.8

Sharing risks ????? No on the proposals the Plaintiff lawyers will take all the risk including an even worse risk re wasted costs it not being possible to prevent large corporations paying bills of their obstructive lawyers who have been ordered "to pay costs personally".

The playing field is not even and that is what legal aid has provided.

The claims are in fact simply not speculative there is a pre consideration procedure to assess the merits of legal aid support both legally and financially if the defendants were sensible they would not have the problems.

3.9. The Government has been criticised for moving too quickly in beginning the targeting and prioritisation of legal aid. It is argued that it is too soon to know whether conditional fees could be a suitable alternative in areas where they do not presently exist; or that some cases are inherently unsuitable for conditional fees; or that the financial bases of lawyers' practices would not enable them to take cases under conditional fees for clients unable to meet disbursements or insurance premiums. At the same time that the Government is urged to caution, legal aid delivers less and less help to fewer and fewer people. 3.9

And it will deliver even less to fewer and fewer people if the present proposals are adopted solicitor offices will close or there will have to be more money paid for less service and probably both

3.10. The Government firmly believes that to bring about change, especially change that is necessary and long overdue, it should look for radical and innovative solutions. We require new ways of thinking and a readiness to grasp and exploit new opportunities. We are told we cannot move forward without proving the next step but we cannot prove the next step without moving forward. This Government does not favour a status quo which fails those in need, fails the taxpayer, and fails the legal profession by entrenching out of date practices. 3.10

An innovative solution to take something away???

Nobody believes in the status quo certainly not me and certainly not the great innovators and forward thinkers who set the system up in the first place.

There are practical improvements not least making the citizen have a direct interest and responsibility in the case by requiring modest contributions in all cases which would mean he would be even more motivated to ensure the lawyer he had instructed was providing a quality service.

3.11. Therefore, the Government is determined to ensure that the legal aid system is modernised to provide help where there is no reasonable alternative, in a way that ensures that help is properly directed towards the priority area of social welfare. The following paragraphs set out the plans for removing, over time as the market for conditional fees and supporting insurance and funding develops, most money and damages claims from legal aid to allow the existing system to focus on priority areas. These plans also prepare the way for the next stage of more fundamental reform. 3.11

If you are making changes in the present you can make a statement that this is modernisation???

It could in fact be going back wards a change is not necessarily an improvement simply because it is made and it is not necessarily a modernisation.


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Housing claims

3.12. Claims that arise from people's maintenance, possession, use or enjoyment of their home, whether or not they include ancillary claims for money or damages, ought to remain within the scope of legal aid. Some people - especially those who qualify for contributory legal aid - may find conditional fee agreements more suitable, once sufficient experience has developed among lawyers, and suitable insurance arrangements are available. But it would remain the Government's objective to provide a means by which those eligible could obtain help in meeting legal costs to deal with housing problems (whether bringing or defending proceedings). The problems that the needy face in ensuring a decent standard of accommodation are not generally shared by those who are better-off, and are of a kind that deserve assistance from the taxpayer to obtain the necessary remedies or redress. 3.12

This is one of the areas where it is very hard to obtain legal aid because on the merits test the citizen is often simply wrong. It is also true that there has been trend to reduce the responsibilities of landlords which in some respects is regrettable but at the end of the day if the you are on the wrong side of a case you can't argue it. If the government wants to direct the legal aid into this area they will have to change the law in favour of the tenant to provide an actionable claim.

If housing resources are bad the money will have to come from somewhere to improve the housing and there is the argument that to waste money on litigation (save in a policing environment) may not be the best way of providing the resources.


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Judicial Review

3.13. Similarly, the Government believes that the ability to challenge the acts or omissions of public authorities is a necessary check on the use of the power of the State, and a positive encouragement to maintain high standards in public administration or by public bodies. It believes it right to ensure that the poor are also able to exercise this right of challenge through judicial review, and that legal aid should remain available for those who qualify. Similar special considerations apply where a person claims that he is the victim of some action of the authorities, for example, the police. The Government believes that assistance must continue to be available, for the present, to allow those who qualify for legal aid to bring claims of this kind. 3.13

You have to go through a long procedure of administrative appeals at tribunal level (without legal aid) before you can reach the stage of even starting a judicial review.

Who is going to help the poor to get through that long procedure.


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Defendants

3.14. The Government is not persuaded that, at present, it should exclude money or damages claims where the assisted person is a defendant. There may be cases where a substantial counterclaim is made, in which a conditional fee agreement might provide a suitable alternative to funding from the taxpayer. However, there are few legally aided cases with counterclaims. Without a counterclaim, it is difficult to see how conditional fees could provide an alternative for those defendants who, by definition, lack the means to finance litigation and have no expectation of a money recovery from which to meet any success fee. Legal aid will therefore continue to be available to assist those defending claims against them for the payment of money or damages. 3.14

Well there's a surprise!!!

How on earth was a citizen who had an actionable argument being sued by a large corporation going to find a lawyer to stick his neck out (funding his staff and overheads) and defend him on the basis of only being paid from the other party should the other party lose.

The citizen defendant didn't even choose to be sued in the first place.

If he is in a legal aid position he can't have much money under present rules and the question is what benefit will the opponent have in suing him? It can only generally be therefore cases where the citizen has perhaps a house which is either subject to a charge which is being pursued or could be made the subject of a charging order.


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Medical Negligence

3.15. The Government has received many representations about medical negligence cases. It is argued that these cases present particular problems not generally shared by other types of money or damages claims. In particular, it is argued that there can be significant costs involved in reaching the point at which a lawyer can make an informed decision about the prospects of success. Conversely, it could be argued that experience in this field of litigation ought by now to be sufficient that a solicitor who relied on these cases for his income should be practised enough in structuring his business to absorb the costs of losing cases, within the overall charging structures he has in place. The presence of the Legal Aid Fund has not only allowed this field of litigation to burgeon in recent years, but, with its regular pay-outs from the taxpayer, has cushioned lawyers from the economic realities of operating in this field of law. 3.15 to 3.21

I have to admit this is an area where I have some difficulty in reconciling my libertarian position that everybody should be able to be do what the want without interference from the state or others with the need to ensure that there is proper control where it should exist.

Perhaps at this point it might be appropriate to provide a brief description of my own personal background.

I started out at the age of 17 having been perhaps less than motivated to academic study during adolescence as an office boy but because of my own family background (my father was a state school headmaster who was a by training linguist). I suddenly woke up and realised if I was going to retain my background I'd have to work.

I therefore studied a great deal in evenings and eventually qualified as a "five year man".

I am therefore very proud of having achieved the acknowledgment of qualification. I then worked for a number of firms of solicitors in Hinckley Leics., Coleshill Bham., Leicester, Stockport, Manchester and Winsford Cheshire all of which I retain the greatest respect for and I hope they respond in kind.

Eventually I commenced trading in January 1983 as a sole practitioner in Winsford Cheshire a town of between 35,000 & 40,000 in population which I have no particular connection to other than the fact I had been running a branch office (having been born in Hamburg Germany, my father coming from Bolton Lancs., my mother from Birmingham and I being brought up in Hinckley Leics.)

I had already 17 and 1/2 years experience in the law in 1983 when I started out but since then I have dealt with some interesting cases and continue to do so.

I have dealt with amongst many others:-

  1. the repossession of a political party premises for the benefit of a public institution by way of peaceable reentry against the interests of a chargee.
  2. a legally aided judicial review against the refusal of legal aid.
  3. a legally aided defendant of a mareva injunction
  4. several subsidence and heave civil actions
  5. complex drug/chemical reaction claims

All of which have been successful and I have dealt with medical negligence matters with some success.

I also provide the usual non contentious services of landlord and tenant conveyancing and probate.

I am the archetypal general practitioner who provides a general service for a small/medium sized town.

I of course use the services of suitable counsel when appropriate.

My concern based on experience is that I question the motives of those who wish to restrict particular areas of work to particular groups it is usually in my experience because they want to limit it to themselves and create an exclusive club giving them an apparent "licence to print money" and they are afraid that there might be somebody with talent who actually might be better than them. It is not because they want to ensure the public are protected from inappropriate practices indeed in some cases the "licence" breeds inappropriate practices (e.g.. insolvency practitioners who charge for a voluntary arrangement that is doomed to failure and then when it fails they make the client bankrupt taking massive fees leaving the creditors with nothing and the client destitute)

I say therefore before such a restriction is proposed one should consider what is going to be gained and what is going to be lost and is it going to improve the access of the citizen to a remedy particularly in the provincial towns (as opposed to cities).

In any event all such restrictions must be based upon objective tests of obtaining proper and relevant examination based qualifications rather than then selection on the basis of the old boy net.

In short if the qualification to do the work is that of a solicitor (having passed the relevant impartial objective tests) then that should be enough. If however, additional tests are required then those would require to be taken. I wonder how this would be likely to reduce costs given that the general proposal elsewhere is to pass the legal aid budget on to those who are not legally qualified in an attempt to save costs.

3.16. The Government remains of the view that sufficiently experienced lawyers ought to be able to undertake these cases profitably on conditional fees even where clients could not meet themselves the costs of investigating and running cases. However, the Government accepts that the provision of insurance for such cases is still relatively new and developing, and that many solicitors' firms may not be financially structured to enable them to carry this work. Moving from the present position, with heavy dependence on the regular cash flow provided by taxpayers through the Legal Aid Fund, to the position it believes ought to exist, may be too great a step for many law firms to take quickly. The Government does not intend to remove medical negligence now but will look to do so as the market develops and lawyers adapt to the greater use of conditional fee agreements. Ditto
3.17. However, the Government does need to tackle the problem of the high number of cases that recover nothing or next to nothing. The net cost of medical negligence cases to the taxpayer last year was £27 million. Looking at the cases closed by the Legal Aid Board in 1996/97, 32 cases recovered £500,000 or more. Leaving these cases aside, the average cost of cases was £4,122 to recover average damages of £4,107. In only 17% of cases was £50 or more recovered (and 1996/97 was a good year: closed case data from previous years shows recovery rates between 13% and 17%). Medical negligence cases are a specialist area of litigation. It can be difficult to identify at the outset whether a case has merit, and even as the medical evidence unfolds whether the negligence alleged has caused the ailment or injury. The Government believes that part of the reasons for the high failure rate is that cases are being pursued by lawyers who are insufficiently experienced in this area of litigation. They do not have the experience or knowledge to identify at from the outset cases which have little merit, nor can they properly appraise the evidence of medical reports that would allow them to stop cases sooner. Ditto
3.18. The Government has been told that developments in the conduct of medical negligence litigation are bringing improvements both in the handling of cases and in their cost. New procedures are being developed which have detailed pre- action protocols to make litigation as straightforward in this area as possible. All of these changes will make this area of litigation quicker and cheaper. However a constant theme of the discussions the Government has had with those who are concerned about medical negligence litigation, whether claimants, defendants or other representative groups, has been that the conduct of this litigation ought to be left only to those who have the experience to undertake this work properly. The Government agrees. We propose to limit the right of choice of solicitor who may undertake medical negligence cases under legal aid. Ditto
3.19. In future, the Legal Aid Board should provide assistance in these cases through contracts under Part IV of the Legal Aid Act 1988. Contracts would be given only to solicitors who have shown that they have sufficient competence in this area. Competence might be demonstrated by membership of the Law Society Medical Negligence Panel, or of some other panel (for example, that maintained by the Action for Victims of Medical Accidents), or by some other objectively verifiable criterion. It might not be necessary for the Board to enter into contracts with Counsel, because quality control would be achieved through the choices made by solicitors of the counsel they instructed. It may be thought that solicitors of experience and competence in this area are best placed to select counsel similarly expert. On the other hand, it might be preferable for the Board to have contracts with counsel from whom solicitors could make their choice. Ditto



3.20. Should representation in medical negligence cases be limited to those lawyers, whether solicitors or barristers, who have shown that they have sufficient competence in this area; Ditto
3.21. By what measures might competence be determined. Ditto


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Targeting Legal Aid Provision

3.22. The Government is satisfied that the conditions do exist to allow non-medical negligence personal injury cases to be financed through conditional fee agreements. As has been mentioned, some 34,000 cases had been brought by the end of 1997 using the Law Society backed insurance scheme to protect themselves against the potential costs of losing and having to pay their opponents costs. The premiums range from £92 to £155 (exclusive of tax) and provide cover for up to £100,000 of costs and disbursements. More products are being developed all the time. There is already considerable experience of using conditional fees in this area. The Government is also talking with the insurance and banking industry to help them develop more and even better products that can ensure that lawyers can undertake cases on a conditional fee basis for the poorest client with lawyers meeting on-going costs. The new products might take the form of funding packages that allow a lawyer to draw down part of his fee in advance, or that include 'stop-loss' protection for lawyers against a run of losses in high risk cases. The Government will do all it can to encourage lawyers to adapt to the changing market that they will now find themselves working in, so that those currently receiving legal aid will be able to find lawyers who will act under a conditional fee. Targeting Legal Aid Provision
3.22 to 3.27

I have already indicated why you cannot rely on the take up of costs protection insurance as a measure of the alleged success of conditional fees as they are nothing of the kind.

However I fail to see how a list of exclusions from the scope of legal aid can be placed under the heading "Targeting Legal Aid Provision" it is merely a negative list where is the positive act.

I suppose with perverse logic it could be argued that it is targeting away from legal aid.

3.23. In addition, there are a number of other categories of case in which conditional fees will become available which the Government believes do not have sufficient priority to justify public funding. It intends to remove any claims for money or damages arising from:
  • disputes about inheritance under a will or an intestacy;
  • matters affecting the administration of a trust or the position of a trustee;
  • matters relating to the position of directors of companies, restoring a company to the Register or dealing with the position of minority shareholders;
  • matters affecting partnerships;
  • matters before the Lands Tribunal;
  • cases between landowners over a disputed boundary of adjacent property; and
  • cases pursued in the course of a business.
Ditto
3.24. The extension of conditional fees in these areas will provide increased access to justice for those who presently need help in similar cases but do not qualify for legal aid. The Government believes that almost all cases in these categories can and ought to be financed through a conditional fee agreement. In competition for the use of taxpayers' money, the Government does not believe these categories can command sufficient priority to warrant continued coverage within legal aid. Ditto
3.25. The Government also proposes to remove the categories mentioned in paragraphs 3.22 and 3.23 from the scope of advice and assistance under Part III of the Legal Aid Act 1988. Ditto



3.26. The Government would welcome views on the categories of cases mentioned in paragraphs 3.22 to 3.23 that it is intended to exclude from the scope of legal aid, and whether any other categories of case should be excluded. Ditto



3.27. The changes outlined above will lead to some 60% of money or damages claims being removed from the scope of legal aid. For the remainder, including medical negligence mentioned above, the Government believes that, once conditional fees are extended, the necessary products and experience will become available reasonably quickly to allow it to remove the remaining categories from the scope of civil legal aid. However, the Government wishes to give lawyers and insurers time to gain the experience they need to ensure that where legal aid is removed the market can provide, for cases with sufficient merit, the alternative of conditional fees. Over the next few years the Government will transfer remaining money or damages cases from support through legal aid to financing through conditional fee agreements. Ditto


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Transitional Arrangements

3.28. The Government recognises that the transfer from legal aid to conditional fees has to be managed. The Government will consider whether transitional provision needs to be made for cases which have similar problems to medical negligence cases of high investigative costs or high costs overall. As with medical negligence we expect the market to develop to be able to deal with these cases. However in the meantime we propose to make arrangements to ensure that people with good cases who face these problems may be receive some public assistance. This could be either in the investigation stage or where they have entered into a conditional fee agreement, but the costs of running the very strong cases have become so high that in present circumstances solicitors might generally not be able to bear them (in excess, say of £100,000). 3.28

The government aren't prepared to underwrite £2684. 00. see para 3.3 and why is it that "strong cases" cost so much. If they are strong why is there so much argument?

3.29. Until the success fee is recoverable from the other party it might still prove difficult to find a lawyer ready to undertake the case on a conditional fee basis, if the potential damages are insufficient to cover the success fee, or could only do so by exceeding the 25% voluntary cap. This might be because the size of the claim was relatively low in relation to the likely cost of the case. These may also be cases where transitional help may be necessary. 3.29

Yes in reality the costs are usually the same as the damages or in some cases more but the damages will have to go up as in America.

3.30. As we said earlier we wish to focus legal aid funds among other things on public interest cases. Accordingly where those cases which we exclude from legal aid demonstrate a significant wider public interest, assistance could also be made available under the transitional arrangements ahead of primary legislation. 3.30

Which are the cases with wider public interest. All cases have a potential wide public interest indeed the Legal Aid System is of wide public interest although the general public do not appear to be aware of it, perhaps they will when it has gone and is the government going to remain happy funding actions against itself.

3.31. It will be necessary to decide what should constitute public interest. For example, a test case about a novel point of law might have no more than a 50% chance of success, but the decision could impact on numerous future cases (for example, recent cases involving sporting injuries have extended the duty of care owed by officials wider than was previously accepted). Or a claim for a relatively small sum in damages might benefit a large number of other people with a similar claim. Examples might be claims arising out of the use of pharmaceutical products, and pollution of water supplies or the atmosphere. Very expensive cases often include this type of public interest aspect: they are expensive because they are novel and complex, or because their wide potential impact means that they are hard fought. In the longer term the Government will wish to take powers to fund public interest cases which will potentially go wider than the limited ambit of the special cases fund being discussed here. 3.31

Well the government will have to get on with it as I understand the proposal is to remove P.I. legal aid apparently within about two months of the closure of the Consultation Paper and if it had not had second thoughts it would have gone by the end of March for all money claims.

3.32. The Government wishes to ensure that cases in categories which have been removed from the scope of legal aid, but currently may not attract a conditional fee, for one of the reasons outlined in paragraph 3.28 above, and which also have a significant public interest element, can continue to receive help from the Legal Aid Fund. For this purpose, public interest cases are defined as those which affect, or potentially affect, a wider group of people than those directly involved. To justify legal aid funding, a case would have to demonstrate the potential to produce tangible benefits for a significant number of people in a definable category. This should include cases involving novel points of law likely to have a real impact, but not points that are only of academic interest. 3.32

What about a case where for example a local authority has installed playground equipment which causes injury to a child not necessarily significant injury (sufficient to justify a claim) but with potential to cause considerable injury on numerous others and the manufacturers would prefer not to settle because of the commercial damage or the use of old buses where the emergency exit door is of questionable standard and a child falls out of t