Reforms of ‘no win, no fee’ will play into the hands of big business and media groups, campaigners told peers as they debated the legal aid Bill in the House of Lords this week. (Pic: Buncefield oil depot explosion; credit: Royal Chiltern Air Support Unit)
You can read what ‘no win, no fee’ means HERE and find out more about what the government is proposing below.
‘The government is trying to force its legal aid bill through parliament. What few people know about – because it has had little coverage – is the second part of the bill, which is nothing less than a cack-handed attempt to change the legal system to benefit large corporations when they are being sued.’ John Prescott in the Guardian.
You can read on www.thejusticegap.com:
- Juliet Shaw, the victim of a tabloid stitch-up, on her legal battle with the Daily Mail and her views on how ‘no win, no fee’ can provide a lifeline to people taking on big business and the press HERE.
- The leading claimant lawyer, Des Collins on why he couldn’t have represented the 18 families of children born with birth defects caused by ingesting toxic material from the Corby steel works or the families effected by the Buncefield oil depot explosion without ‘no win, no fee’. The 2005 explosion was reckoned to be the largest peacetime fire in Europe and measured 2.4 on the Richter scale. HERE. You can read about Buncefield HERE.
- Tom Jones, of the trade union law firm Thompsons, on the ‘myth of the compensation culture’. HERE.
‘My motivation was never to get rich. I approached each stage of the battle day by day with the sole intention of the Mail acknowledging that they had treated me shabbily. I never got the apology, but I reluctantly accepted that I didn’t have the resources, mentally or financially, to proceed to trial. Justice Tugendhat’s order that my claim could proceed gave me a moral victory that I could live with.’ Juliet Shaw
‘Six years on we are still arguing about costs, although following successful civil action and the oil company Total being found guilty in the criminal courts in June 2010, the majority of payments to those affected have now been made. Without CFAs, the stakes would have been too high.’ Des Collins on Buncefield.
‘What does a compensation culture look like? Is it statistics which show road traffic accident claims rising year on year? It cannot be the employers’ liability claim statistics, which are falling.’ Tom Jones
In 2000, New Labour scrapped legal aid for routine personal injury cases appealing to entrepreneurial law firms and a new breed of non-lawyer claims companies to fill the newly-created access to justice gap. Such firms would run accident victims claims on a new type of ‘no win, no fee’ deal – or conditional fee agreements, as lawyers call them.
The compo culture: myth or reality?
The main reason for the shakeup, according to the justice secretary, Ken Clarke, is to cut back the ‘compensation culture’ encouraged by the last Labour government –despite the fact that research suggests the compo culture doesn’t exist.
That was certainly the view of Lord Young of Graffham. In December 2010, David Cameron, as leader of the Conservative Party, asked Young, who served in the Thatcher administration, to conduct a Whitehall-wide review of health and safety laws and the growth of the so-called ‘compensation culture’.
His report found ‘behind the myth, the truth behind health and safety hysteria, the problem of the compensation culture prevalent in society today is one of perception rather than reality.’
‘Many of the stories we read and hear either simply aren’t true or only have a grain of truth in them,’ claimed the government advisory body, the Better Regulation Task Force, in a 2004 report in a report on the compensation culture. Chapter titles included ‘Exploding the Urban Myth’ and ‘It’s all in the mind’. Less consolingly, the BRTF concluded we live in a ‘have-a-go’ society. Inaccurate press coverage, combined with the antics of claims companies, encouraged people to ‘have a go’ creating ‘a perception, quite inaccurately, that large sums of money are easily accessible’.
The current changes to ‘no win, no fee’ arrangements represents ‘a complete and unnecessary policy about-turn, when a lean on the tiller would achieve the desired improvements’, reckons the Law Society’s chief exec Des Hudson. ‘They favour the wrong-doer and their insurers rather than the injured person. We call upon the Government to think again otherwise the only result will be rejoicing in the boardrooms of insurance companies at the expense of the injured victim.’
What does ‘no win, no fee mean’?
It is a deceptively simple phrase. On one level it means (as the name suggests) solicitors are paid nothing for their work if they lose (but can charge more if they are successful). Until relatively recently lawyers were not allowed to have any financial stake in the outcome of the case. Until 1967, if a lawyer was to take a slice of the spoils it was a criminal offence (known as ‘champerty’).
There are two types of ‘no-win, no fee’ arrangements:
- Conditional fee agreements. This is the only type of ‘no-win, no fee’ agreement that is allowed the vast majority of cases. It has two important features:
1. the success fee. Your solicitor is allowed to charge extra so as to reward his risk-taking in the event of a successful result which can be as much as double his fees. If you don’t win, the losing side (generally speaking) will pick up this expense.
2. after the event insurance. The general principle of the UK courts is that ‘the loser pays’. You will not have to pay your own solicitors’ costs win or lose under a ‘no-win, no fee’ agreement but you could be liable for your opponents costs. So for the price of the insurance premium, you can take out a policy to cover the risk as well as other outgoings such as court fees, medical report to police reports. Normally you don’t actually pay anything because the cost is generally wrapped up in the insurance policy.
- Contingency fees. This is much more straightforward. The solicitor takes as his be a slice or straight percentage of the award. At the moment such agreements are limited to what are known as non-contentious actions (i.e. not involving court proceedings) and are especially popular in employment tribunals.
What is being proposed?
Ministers are proposing that the success fee is no longer to be paid by the other side but, instead, it will be paid by you from your injury award. Some protection is to be provided by capping the success fee at a maximum 25% of the value of your award. To go some way to compensate for the impact on your damages, ministers are proposing that the awards for the injury aspect of your claim be raised by 10%.
If you want to find out more read Barbara Hamilton-Bruce’s article HERE.
Jon is editor of the Justice Gap. He is a freelance journalist. Jon's books include The First Miscarriage of Justice (Waterside Press, 2014), The Justice Gap (LAG, 2009) and People Power (Daily Telegraph/LawPack, 2008). Jon is a journalism lecturer at Winchester University and a visiting senior fellow in access to justice at the University of Lincoln. He is twice winner of the Bar Council's journalism award (2015 and 2005) and is shortlisted for this year's Criminal Justice Alliance's journalism award