The government must consider how civil cases would be funded if the after-the-event insurance market collapses, taking with it the conditional fee agreement model, the Civil Justice Council (CJC) said last week.


In its final report on the future funding of litigation, the CJC said contingency fees could be one answer. 'The introduction of properly regulated contingency fees would simplify the funding system, reducing satellite litigation and the role of costs intermediaries,' it said. In any case, the report suggested allowing court-regulated contingency fees in multi-party cases where no other funding is available.



However, a formal recommendation to the Lord Chancellor that research into contingency fees be conducted - contained in the CJC's draft report - has been dropped.



The main recommendation is that a supplementary legal aid scheme be established by the Legal Services Commission, which would receive a levy on damages recovered to increase legal aid coverage. It also backs wider use of third-party funding.