A recent Sunday Times article discussed a case of a client ending up with a large legal bill after signing up to a Conditional Fee Agreement (CFA). The client was shocked to receive a large bill of many thousands of pounds despite believing she was on a “no win no fee” agreement. This kind of example is why the Legal Ombudsman is keen for the phrase “no win no fee” to not be used, because there is a danger that it is not always made clear to clients that there are some circumstances where the client ends up incurring legal costs. Also, lawyers need to ensure that they carefully consider cases before taking it on a litigation CFA to ensure they are well founded otherwise it may be to the detriment of the client and the lawyer.
Lawyers should advise the client at the start of the matter of all the options available for funding a case, such as existing litigation legal expenses insurance attached to a household or car policy. It may seem obvious but if a client does not win their case then they are usually faced with the other side’s legal fees. Clients can take out After The Event Insurance but what is not commonly known yet is that the insurance premiums are no longer recoverable from the other side and it has to be paid out of the winnings. It is very difficult to obtain litigation After The Event Insurance for cases that are relatively small in value, ie not larger than £100,000, and where you do obtain insurance the premiums can be very high in proportion to the amount you might expect to recover if you win.
The change regarding the recoverability of insurance premiums from the losing party has had a big impact on the funding of litigation, and some would argue it has restricted access to justice for many. With this in mind, the proposals for introducing fixed recoverable fees for litigation by Lord Jackson seem to be a sensible way forward and would give a client certainty as to what the risk is if they engaged in litigation. Whether law firms will expect clients to pay more than the fixed allowable amount is a matter for particular firms. Law firms should keep proportionality in mind when it comes to fees; those who bemoan the introduction of fixed fees are possibly those who contributed to their introduction by charging massively disproportionate fees. Summerfield Browne is a firm that is keen on offering reasonable fee levels to its clients and ,to this aim, fixed costs are an important element.
Summerfield Browne Solicitors have offices in London, Birmingham, Cambridge, Oxford, Leicester and Market Harborough
