Call for CFA costs penalties

If the client care provisions in the conditional fee agreement (CFA) regulations are moved to the Law Society practice rules as planned, costs judges should be able to take a breach into account in solicitor and own client costs, but not in party-and-party costs, leading figures in the CFA field agreed last month.

The high-level group was gathered together by the Department for Constitutional Affairs at the request of civil justice minister David Lammy to discuss issues of funding litigation and especially its consultation paper on simplifying CFAs.


The Gazette’s sister publication, Litigation Funding, was given exclusive access to the roundtable discussion on the basis that the participants could be named but that specific contributions could not be attributed.


There was broad agreement that while CFAs could be simplified, they will never be simple.


Views differed on how much defendants might still challenge CFAs after reform – but at least a deficiency in a CFA would no longer render it unenforceable.


It was said that currently the effect of a breach of practice rule 15 is uncertain. There was consensus behind the idea that the Civil Procedure Rules should protect the client in the event of a breach, but in a way that discourages satellite litigation.


There was little enthusiasm for contingency fees and making before-the-event insurance compulsory, but near-unanimity behind abolishing the indemnity principle.


The roundtable acknowledged that there is no one-size-fits-all solution to funding issues, but with predictable costs and success fees, some stability is possible.


However, there was concern that fixed fees do not encourage any behavioural change in defendants, and that their value will not keep pace with the market.