I write in response to a number of recent letters about the funding of civil claims. The biggest cause of unfair costs is the blanket approach of the success fee and the premiums for after-the-event (ATE) insurance (often far in excess of the price of any car insurance policy).
I remember studying the concept of the conditional fee agreement and uplifts during my legal training (not so long ago), and the message I received was that cases were assessed on their merits, and the uplift was a result of a considered assessment of the true risk of litigation.
This is of course not how it works in practice. All uplifts are set at 100%, even where there is no risk.
Take, for example, an infant claim I recently settled where the damages were agreed before part 8 proceedings were issued. An uplift of 12.5% was charged on solicitors’ costs and 100% uplift was charged for counsel’s fee for attending the infant settlement hearing.
There was no risk to either solicitor or barrister in that case, yet the defence had no legal argument and solicitors’ costs exceeded £13,000 – for two minor claims which were guaranteed to be paid. Certainly, the defendant in that instance, contrary to Duncan Paine’s suggestion had no ‘control’ of costs.
As for ATE policies, again the blanket approach of premiums is unjustified. Where a litigation risk is low, the premium should be low. Working on the defendant fraud side of the industry, I also know that some of these so-called ‘policies’ are arbitrary in their nature as, in view of the defence pleaded, the policies will never be honoured even if the claim is defeated.
How, therefore, can these policies be so readily accepted as payable by the defendant? There is no consideration of what they are really offering. All other insurance policies consider the individual circumstances before a premium is set, but not so here. Especially when looking at ‘blanket’ policies taken out by claimant law firms.
If these issues were addressed, and solicitor costs and ATE charges were fair, then perhaps the legal costs system would not be in the mess it is in.
Laura Kelly, Greenwoods, Manchester