Conditional_approval

Top lawyers raise CFA ethics problem ran a recent headline greeting the publication of the Society for Advanced Legal Studies working partys report on the...Top lawyers raise CFA ethics problem ran a recent headline greeting the publication of the Society for Advanced Legal Studies working partys report on the ethics of conditional fee arrangements (see [2001] Gazette, 1 Feb, p3).

New funding methods are bound to lead to different ethical issues from the old.

However, with the Access to Justice Act, the new solicitors practice rules, new CPR costs rules and a lengthy practice direction, conditional fee agreements must already be the most closely regulated method of funding litigation ever.

What new problems has the societys working party identified and what are its proposed solutions?Unfortunately, the report reads as if it were largely composed prior to the changes to CFAs introduced by the act and the associated regulations, rules and practice directions.

Only one working party member appears likely to have had any significant experience of CFAs in practice and the working party as a whole appears to have undertaken no independent evidence gathering.It is particularly concerned with a cap on the amount of the clients damages that can be used to pay costs.

It maintains that this should apply to all costs and be mandatory.

It appears to be unaware that it no longer appears in the Law Societys model agreement.Its purpose was to protect the client.

However, since April 2000 the losing party, and not the client, pays the risk element of the success fee, which is by far the greater part.

Even if claimant lawyers were itching to get their hands on any shortfall by taking it out of the clients damages, they are forbidden from doing so without the courts permission.

Solicitor and own-client costs might still be charged on top, but so they can in any other method of funding.

The remaining element of the success fee for postponement of fees, which can be charged to the client under the regulations, is unlikely to be so high as to justify yet more regulation.

Abolition of the indemnity principle is necessary so that CFAs can be made simple and understandable to clients.

The working party does, in fairness, recommend this, but oddly it seems to think this is necessary to allow lawyers to cap the deductions from damages.

In fact, many claimant lawyers want to be able to make it crystal clear to the client that they will pay nothing, win or lose No win, no fee, no deductions from damages whatsoever.

That will no doubt come as a surprise to the working party, which seems to expect lawyers working under CFAs to behave badly whenever possible.There is a good review of the issues raised by the after-the-event insurance market, but absolutely no answers other than that more research is needed.

The working party recommends that all lawyers doing CFA work should undertake compulsory risk assessment training.

Im all for that but it is a breathtaking idea that a lawyer who is paid by the hour, win or lose, does not need risk assessment training, while a lawyer on a CFA does require that training.

The shame for the profession is that we have not previously recognised that all lawyers should be trained in risk assessment for clients benefit.Theres a strange recommendation by the working party that in CFA cases the drafter of a witness statement must certify that he hasnt forgotten basic professional duties and made up its contents so as to help win the case and earn his fee.

This report should have been shelved and completely rewritten, following proper evidence gathering, to deal with the post-April 2000 world David Marshall is a partner at London-based Anthony Gold Solicitors and treasurer of the Association of Personal Injury Lawyers