Attack_on_indemnity_rule_gathers_pace

In his inaugural lecture as a professor, John Peysner of Nottingham Law School added to the increasing weight of calls seeking the end of the...In his inaugural lecture as a professor, John Peysner of Nottingham Law School added to the increasing weight of calls seeking the end of the indemnity principle.Section 31 of the Access to Justice Act 1999 allows for rules of court to limit or abolish the indemnity principle.

At the request of the government, the rules committee is investigating the future of the principle in the light of collective conditional fee agreements, which could be made unworkable if it remains.

However, there is still some doubt as to whether any change will apply just to collective conditional fee agreements or to all cases.

Professor Peysner said the existence of the indemnity principle was also acting as a bar to progress on introducing fixed fees or capped fees as a means of bringing certainty to fast track costs.This is because fixed costs would conflict with the indemnity principle as it is possible that the clients liability might be less than the fixed amount recoverable.The principle caused acute problems for solicitors wanting to offer a genuine no win, no fee service, with a guarantee to clients that they would not charge unrecovered costs, he added.David Hartley, head of the Law Societys remuneration team, said: We no longer believe that the indemnity principle serves any usefu purpose.

It will need to go to ensure that collective conditional fee agreements will work properly.Mr Hartley said that it would be a nightmare for solicitors working for bulk purchasers of services with attendant differential rates depending on the volume of work and success to calculate where the indemnity principle figure applies.Neil Rose