Litigation has experienced very profound changes in the last 20 years.

In the early 1970s approximately 25,000 solicitors held practising certificates and litigation was not central to their income.

Legal aid was relatively underdeveloped and access to lawyers for advice by individuals was relatively uncommon.

Nowadays some 60,000 solicitors are in practice, with a not dissimilar increase in the number of barristers.

The income of the legal profession has similarly grown.

Litigation now forms a central part of this activity.

The general increase in economic activity has had an impact in increasing litigation but, taking into account historical growth rates of around 2.25%, this cannot be the sole explanation.

Litigation promoted by trade union or other organisational support or through legal expenses has also had an impact but one of the most important engines of growth has been the development of legal aid.The picture has completely transformed from that of the early 1970s when legal advice was restricted to the old 'pink form' and legal aid was regarded as the poor relation in provincial practices where domestic conveyancing was king.

The increase in litigation, including the increased use of legal aid, has created a problem for the civil justice system.

The response has come in two main ways: first, through the introduction of conditional fees, prompted by perceived pressures on the public purse; and, secondly, through the Woolf review which was prompted by the rising expense and delays in litigation.

It is not possible to ignore the introduction of conditional fees and assume that they will simply be a seven-day wonder.

Our view assumes:1.

That the present government does not intend to remove the capping on the legal aid fund, which will have the effect of restricting accessibility and the long-term growth of litigation funded by this route.2.

That any future Labour government will not have as a central objective a desire to pump money into legal aid practices.3.

That the funding of litigation by legal expenses insurance will remain restricted to the support of litigation in narrow sectors.

There does not seem to be overwhelming demand from the population for a generic product which would allow them to become involved in dispute resolution with no cost at the point of demand.4.

That the Woolf review, by introducing a range of possibilities of dispute resolution, of different degrees of complexity and exp ense, offers the prospect of simpler, more straightforward and more accessible justice.

For the mass of 'ordinary litigation', involving personal injury, consumer and contract disputes, and modest commercial cases, the new procedures will encourage a 'no frills' approach.5.

That the present restrictions on conditional fees to personal injury cases, insolvency and European human rights cases represents merely the first of a number of areas which can be covered.

If successful, conditional fees have a future in a range of disputes including housing disrepair (not involving personal injury), contractual breaches and, even, defamation.

In Arata Potato Co Ltd v Taylor Joynson Garrett [1995] Solicitors Journal, 16 June, 587 the plaintiffs, a firm of solicitors, were retained by the defendants to carry out a series of matters.

A 'reward system' was built in with the plaintiffs earning 20% more in an individual case if successful.

On the present state of the law, this was rightly held to be an unenforceable contingency fee: the contingent element can relate to the sum recovered or to a proportion of the bill.

Now that the principle of conditional fees have been accepted it would seem a simple step to extend them to this type of commercial arrangement.6.

That if conditional fees are successful then the Law Society will be encouraged, or perhaps will have no option, but to agree that legal aid could be withdrawn in the specific sectors involved and concentrated in areas where conditional fees would not be appropriate or workable.7.

That continued growth of personal incomes, allied with a standstill in legal aid eligibility will result in the freezing of the legal aid scheme, irrespective of any further policy decisions.8.

That the availability of 'after the event' insurance provided on an across the board basis by Accident Line Protect, or tailormade by other providers, is likely to expand, as the amount of information about the quality of lawyers' decisions in this area, and the level or gross conditional fees increases.

As accessibility to different products grows then the ability of new litigation clients to enter the market will increase.9.

That legal aid will be available only to franchisees who will be 'encouraged' to adopt common management accounting and pricing structures.These assumptions, none of which appears to be wholly unrealistic, suggest two central strands of any new litigation system based around conditional fees:1.

That the basis of costing by litigators will become increasingly clearer and transparent, encouraging fixed price fees, agreed at the start of the case rather than simply an estimate based on hourly rate.2.

That the ability to give potential litigation clients simpler and more accurate information about the financial end result of litigation, against which can be judged the comparative merit of buying insurance to cover the risk, will encourage a growing number of people who are not eligible for legal aid to instruct litigators to help them resolve disputes.If this market develops strongly then it is more than possible that other organisations, such as businesses, insurance companies and even the legal expense insurers may look to instructing their own lawyers on a modified conditional fee basis, whether as plaintiffs or defendants.For a litigator to succeed in this new era the central and defining skill is that of risk management.

The nature of 'no win, no fee' litigation transforms the decisions involved in setting up and organising a litigation caseload.

The key questions that have to be an swered are: should your practice carry out conditional fee litigation; how should the litigation be managed; should a particular case, offered to you on a conditional fee basis, be accepted; who should carry out the conditional fee litigation; how might IT systems help to inform decision making and how should litigation support systems be used; what is your pricing structure, that is the percentage 'success fee' (increase on your basic hourly rate) you will be prepared to accept in order to take the case on; what is the reward for the risk; and what will be the impact on conditional fee litigation of the defendants' strategy and tactics, and of the court's approach to case management, and what will be your response?