We live in very strange times.

From the Statute of Westminster in 1275 until a little less than 10 years ago speculative litigation was contrary to public policy.

This was because it was considered that it affected -- as it does -- the independence of the lawyer so that his advice might be distorted, he might exploit his client and he might engage in practices which were contrary to the interests of justice and thus undermine its integrity.Section 58 of the Courts and Legal Services Act 1990 changed the situation and made conditional fee arrangements permissible.

It was introduced, I am sorry to say, and I believe quite unintentionally, on a false prospectus.

We were told initially that only 5 per cent could be added to the costs of the solicitor.

Later on it was increased to 10 per cent, then to 20 per cent; and then, with great hostility from the Lor d Chancellor's own Advisory Committee, it went up to 100 per cent.

However, it was intended that it would have no effect on legal aid.

As a result we have s 15 (4)(a) of the Legal Aid Act 1988 which provides, "A person shall not be refused representation for the purpose of any proceedings on the grounds (however expressed) that it would be more appropriate for him and a legal representative of his to enter into conditional fee agreement (as defined by s 58 of the Courts and Legal Services Act 1990)".Despite the Lord Chancellor, at the annual meeting of the Bar, in his capacity of Shadow Lord Chancellor, drawing attention to the fact that, "Supporters of legal aid must never cease to emphasise that it is a highly successful public social service", it is now proposed that legal aid should cease in money recovery cases and in its place should come the conditional fee.

The Lord Chancellor may recollect the debate that took place on the Conditional Fee Agreements Order -- which the then Government very nearly lost -- in 1995, and his comments as regards the uplift.

He said on June 12, 1995:"Personal injury cases, as the noble and learned Lord has rightly observed, are a low risk area of litigation from the standpoint of plaintiffs.

In the vast majority the plaintiff succeeds in whole or in part.

In fact, I understand that around 95 per cent settle, to the advantage of plaintiffs, without any court order.

In my view the first thoughts of the noble and learned Lord on the Woolsack on this subject were correct.

A 10 per cent or at most a 20 per cent uplift was sufficient incentive.

He should have adhered to that".I do not know whether that accounted for the statement in Access to Justice.

A fair Way Forward produced, I believe, for the Labour Party Conference in 1995, where having dismissed the concept as a "gimmick designed to mask the chaotic state of the legal aid scheme and the court service" it went on to say, "We regard conditional fees as an experiment to be monitored closely".I emphasise those observations because it was the Lord Chancellor's own Advisory Committee who advised his predecessor in 1995 that, given the novelty and the potential risk to litigants of this untried scheme, it must be effectively monitored.

Merely monitoring a sample was not, in the Committee's view, sufficient.Conditional fees were introduced in July 1995 and all the Lord Chancellor's Advisory Committee was permitted to do was to commission the Policy Studies Institute to provide a report on a sample.

The sample involved only 60 lawyers and 197 cases.

The report is entitled The Price of Success.

I refer to three excerpts from that report.

At page xvii it states:"Many of the potential problems identified before conditional fees were introduced seem to have been successfully addressed".That is an observation which the Government have relied on frequently.

However, in the next sentence the report continues."However, there are still two areas of difficulty, and these are the two most crucial elements to the success of the scheme: the estimation of risk and the calculation of the uplift".I turn to the conclusions at page 84 of which the following is a short excerpt:"In this section, the conclusions of the rest of the report are brought together and recommendations made.

The recommendations almost all consist of further suggestions for future research or monitoring.

Although the survey has answered many questions about conditional fees, it has probably raised more".Finally, and perhaps most important of all, is the following quotation from pa ge 86.

It is headed "Assessment of Risk".

It states,"The research raises serious questions about the way in which solicitors assess the probability of success of cases.

Personal injury claims generally have a very high success rate, yet solicitors in this survey rated a large proportion of cases as having relatively small chances of success.

There are a number of possible explanations" -- and these are referred to:"This is a crucial issue, because it affects the level of fees that the client pays to compensate the solicitor for the risk of not being paid at all.

If the public suspects that solicitors are inaccurately estimating the risk, it will undermine their confidence in the whole system.

If they believe that solicitors are doing so in order deliberately to inflate the uplift, despite rules on professional conduct, there is a risk that the whole conditional fees system could be brought into disrepute.

This would have serious implications for the extension of conditional fees (in other areas)." (emphasis added).It then sets out the various respects in which further inquiries should be made and cautions against any extension to other areas of civil litigation until the problems that it raises are addressed.In the speech which the Lord Chancellor made at Cardiff, which was in the month after this report was published -- and the report went to him par excellence, no mention at all was made of the report.

There was this observation, "Conditional fees are working well in the personal injury field".Were they? Not from the perspective of the litigant.

The average level of uplift was 43 per cent.

That is in a field where 90-plus per cent.

of the cases were bound to succeed.

In 10 per cent (one in ten) cases, the uplift was between 90 per cent and 100 per cent!I refer again to the Lord Chancellor's comments that 10 per cent, or at the most, 20 per cent, was quite appropriate in this field.

So prima facie some -- and may be a greater part of the litigants, to use the vernacular, had been "ripped off".

Why was not this mentioned? Has there been -- as it would appear -- some economy with the truth? Only further monitoring can show what happened to the claims? Were there any writs? Were they followed by actions? Were the actions fought out, and with what result?There was a debate in the House on December 9 on the Lord Chancellor's Cardiff statement.

I submitted -- largely on the material which I have mentioned -- that we do not know enough yet about conditional fee arrangements and how they work, to allow them to take the place of legal aid.On January 20, there was a television programme, File on 4.

Again, this would have been well known to the Lord Chancellor and his department because featured on that programme was his right-hand man in the Commons, Mr Hoon, who observed -- I quote from page 11 of the transcript:"There was a specific piece of academic research conducted by the PSI into a number of cases, by no means the total, but which concluded that there were no substantial difficulties about the way that the scheme worked and indeed which encouraged us to consider extending conditional fees".There is no indication in that statement that those carrying out the research had any form of reservation or anxiety.

It was a classical "spin".Fortunately, the lady who carried out the research, Miss Yarrow, was also on the programme and, having heard what Mr Hoon had said, she said:"We're concerned that solicitors may not be calculating accurately the risk of success of the case, and it's on that calculation that the whole su ccess fee is based.

They seem to be saying that cases are a higher risk than they actually are, and that then means that the client is going to pay more.

I think the issues about the way the success fee is calculated have not really been resolved, and more attention needs to be given to this before such a drastic action is taken."That is, of course, replacing legal aid -- "And so far we haven't seen any signs from the Lord Chancellor's department that they are addressing this issue.

Instead they've tended to concentrate on the positive aspects of our findings", to which I have referred above.On February 18, I tabled a Written Question in these terms, to ask Her Majesty's Government:"Whether, since the publication in September 1997 by the Policy Studies Institute of its report, The Price of Success, they have carried out or caused to be carried out any research to determine whether the practice of conditional fees is working; and if not why not".Back came the answer, signed by the Lord Chancellor:"In the five months since the Policy Studies Institute report was published, I have not commissioned further research on the practice of conditional fees.

As the noble and learned Lord will know, the Policy Studies Institute report concluded that many of the potential problems identified with conditional fees before they were introduced appear to have been successfully addressed.

I accept that further research, at the appropriate time, may be necessary and I plan to seek views on what further research might prove useful in the consultation paper that I plan to issue shortly" Official Report, December 18, 1998: col WA 49.I suggest that is grossly unsatisfactory.

In the observation made by the Lord Chancellor on legal aid Statement on March 4, he said:"The overall picture that emerges is that the scheme [conditional fees] seems to be working as intended".On the material I have produced, it is doing no such thing.

If the monitoring had continued, one would have seen clear evidence of the extent to which litigants had been required to pay, on the Lord Chancellor's own approach, more than was appropriate.

That is why I used the words "economy with the truth".

At this stage it would be quite wrong to carry the use of conditional fee agreements any further.

Unless and until the Lord Chancellor instructs the Policy Studies Institute to complete its monitoring of the 197 cases and we know the results, the Lord Chancellor should suspend his proposals and attention should focus on the Bar Council's Contingent Legal Aid Fund suggestion.

-- See also "Gamma minus?" on p 486