It is reg 3 of the Conditional Fee Agreements Order 1995 which provides that the 'maximum permitted percentage...is 100%'.

Lord Ackner's comment in the House of Lords to the effect that conditional fee agreements (CFAs) are 'marvellous for lawyers but bad for clients and therefore a bad idea' was right.

What is disappointing is that the opportunity has not been taken to introduce the just and popular Contingency Legal Aid Fund (CLAF).

With a CLAF the plaintiff agrees to pay, say, 10% of his damages to the CLAF.

The CLAF pays the lawyers' costs (both sides) when a case is lost.

There are then no conflicts of interest, and the lawyers are not suing for their own fees.What is wrong with CFAs is this - damages: £5000, costs: £4000, and £500 is taxed off.

The 100% 'permitted percentage' will be £4000, which, with the £500 taxed off, totals £4500.

The plaintiff is left with £500.

His lawyer has, however, recovered £8000 in fees: £3500 from the defendant, and £4500 from the plaintiff.The other side's costs have to be paid.

Insurance to cover this is provided by the Law Society's negotiated premium at about £100 per case.

If the defendant's costs are taxed at £3000 it requires 30 insurance premiums of £100.

This means that insurers expect solicitors to conduct 30 cases where they recover double the fee for each one which is lost.Reg 4 requires the client to 'have his attention drawn to' (i) any entitlement to legal aid; (ii) when the client has to pay the solicitors' fees; (iii) when the client has to pay the other side's costs; and (iv) the right to taxation.

This 'drawing of attention' should be in writing, and should be signed by the client.

A checklist signed by the client would be good evidence in any subsequent professional negligence litigation.Para 2(4) of the order contemplates legal aid being granted after a CFA has been entered into.

If the prospect of success on conditional fees has gone, it is hard to see how the prospect of success on legal aid could be justified.Every CFA has to be in writing (reg 6).

CFAs between a client and a legal representative must be signed by the client and the legal representative.

Reg 6 also refers to agreements between a 'legal representative and an additional legal representative', which means solicitor and barrister.

('Barrister' is not in the thesaurus of the LCD's word processing program: this may explain the new term 'additional legal representative').

CFAs between solicitors and barristers m ust be in writing, but they do not need to be signed by anyone.

The dangers of word processed agreements containing slightly different terms and none being signed do not need further discussion.

The Law Society and the Bar Council could usefully agree on standard forms for such agreements.

These should include (a) what is to be the percentage increase for solicitor and barrister; (b) when payment is to be made; and (c) rejection of advice to settle or accept payments in.Advice on settlement will cause problems.

Suppose the advice is to settle, but the client wants to go on; after all, he has nothing to lose.

There could be a term in the CFA to the effect that: 'The client will not unreasonably reject legal advice on settlement and on such rejection of advice the CFA is terminated.'Who decides what is 'reasonable'? Is it the solicitor (legal representative) or barrister (additional legal representative)? Or should there be an independent legal adviser to whom the papers are referred? The offer could be made at the door of the court.

Solicitor and barrister see three days trial and possible defeat ahead.

The client sees 50% offered and rejects it because he could get 100%.

Could the CFA be terminated then? It is harsh and unjust for solicitor or barrister to bear the costs of, say, a three-day trial, when either might have advised acceptance of an offerThose who stand to gain most in the long run are the insurers in personal injury claims.

They will now be able to settle personal injury claims for a good deal less than the proper value.The plaintiff's solicitor and barrister are not likely to advise rejection of an offer: their fees are at stake.

Insurers know this and will make offers accordingly.The draft regulations and order must be passed by both Houses of Parliament.

Because they are unfair to litigants, I hope Parliament will reject them.George Pulman QC-- If lawyers really mean what they say about providing legal services to the consumer public, we should universally welcome the long awaited introduction of conditional fees, finally, into the finishing straight.

Beyond doubt, a 'no-win, no-fee' payment-by-results system will partially plug the funding gap that trap the many would-be litigants who fall outside legal aid and lack the private finance to fund a claim.For once therefore, that much used phrase 'improving access to justice' will really mean something - to the many who are presently denied it, conditional fees will provide the key to the court door.

And, importantly, this funding key is available not only to individuals in personal injury and human rights cases, but also to the business sector in insolvency proceedings by companies and trustees in bankruptcy.Conditional fees also round off the package that offers accident victims the confidence to seek legal advice - the accident line scheme, the personal injury panel, and the vital after-the-event insurance to cover the other side's costs if the case is lost, something successful defendants will also like.Yet the sceptics will predict that at worst conditional fees will undermine the legal system, or at best will unbalance the litigation playing field.

Those who warn that the maximum success fee of 100% will lead to exploitation forget that (i) the Law Society's model agreement, based on the conditional fee regulations, places a cap limiting the success fee to 25% of the client's damages; (ii) the existing regulatory framework of practice rules and written professional standards on costs casts a disciplinary shadow over the solicitor who fails to ac t in the best interests of the client; and (iii) the success fee which must reflect the risk in the case is open to reduction on taxation.

The lawyer who agrees a 100% success fee with a passenger in a car accident will do so at his peril.The sceptics will also look across the Atlantic to find support for the suggestion that the lawyer who has a financial interest in the outcome of the case will be tempted to undersettle when an offer is made.

This misses the point, as the Master of the Rolls pointed out in his speech to the Holdsworth club last year, compared to our legal aid system, where the lawyer gets paid win or lose, the assimilation of the interest of client and lawyer in assessing the risk of accepting an offer or proceeding to trial is one of the advantages of the US contingency fee system.So when dinner party conversation shifts from the usual 'how can you act for a defendant you know is guilty?' to 'will conditional fees mean that, like America, we will soon be suing MacDonald's for injuries caused by hot coffee?', we must explain the compelling facts of that case, and we must urge caution against alarmist claims of widespread frivolous litigation in the USA.

Conditional fees will not promote unmeritorious claims - rather the reverse - and they will provide an additional and long overdue funding option that will possess the rare distinction nowadays of actually improving access to justice.Michael Napier