Call to use CFAs in negligence cases

By Victoria MacCallum Professional negligence actions are the most suitable type of business claim for conditional fee arrangements (CFAs), but the high cost of insurance premiums means they are not an option for many low-income families, research indicates.An Institute for Advanced Legal Studies report on the impact of legal aid reforms on civil litigation also claims that the legal aid funding code is too reliant on solicitors' often inaccurate forecasts.Its author, Tamara Goriely, said: 'Professional negligence claims are most suitable for CFAs because they have a reasonably high success rate, are brought against deep-pocketed defendants and can produce substantial damages.' There is no legal aid for this type of claim.However, after-the-event insurance premiums are too expensive for many people.

'Until the premiums are substantially reduced, CFAs are not a viable way for low-income families to bring claims.'CFA expert Kerry Underwood, senior partner of St Albans firm Underwoods, said the problem was not only that premiums were too high, but that for risky cases getting insurance at all was difficult.

'If the premiums are too high because the claim is seen as a risky one, people who cannot afford to pay are denied access to justice - which is an issue under the Human Rights Act,' he said.

The report recommended that the Law Society should produce a model CFA for professional negligence cases.

A Law Society spokeswoman said: 'Since CFAs were introduced the Society has given a lot of guidance to the profession.

The second edition of the Society's guide to CFAs will be available shortly and takes a broader look at CFAs in civil litigation.'More generally, the report said there should be legal aid provision after business failures, and that the 'arbitrary' exclusion of trusts law from legal aid should be reviewed.For cases which remain within legal aid and so are subject to the funding code, solicitors' predictions of success should be strictly monitored, as many tend to be 'unreliably optimistic' about their chances.

The report studied 1,269 cases and found that only 56% of those where the prospects of success were put at 80% or more, were actually won.Legal Services Commission chief executive Steve Orchard said there is a limit to how far it can monitor predictions.

'Where effective monitoring can be done, it will be,' he said.

'There is often a tendency at the start of a case for a solicitor to misjudge the case and genuinely get it wrong.'