Death knell for CFAs?

Following the conclusion of Callery v Gray in the Court of Appeal, it is now clear to Lord Woolf, the Master of the Roles and others hearing the case that a major question has emerged; are CFAs for personal injury cases, especially fast-track cases, dead in the water?Now that the introduction of a two-stage success fee is almost certain - the proposals appear to be nil or almost nil success fee until liability has been accepted or denied during the personal injury protocol period -- where does this leave firms that have accepted the premise that conditional fee agreements are the way forward?What is more, where previously the presumption that a higher success fee could reasonably be charged - where liability is denied - was accepted, now there will be a significant cap.

Leading counsel have proposed that significantly higher success fees at the end of the protocol period - where liability is denied - should not exceed 10%.So why contemplate using CFAs at all? The idea, unsupported directly by any statute or rule, that success fees compensate law firms for lost cases has clearly been shown up as false.

It is proposed that the question of success fees should be looked at case by case with a base line; for the vast majority of personal injury cases that settle, it will be nil or so close to nil that it will make no difference.

Having been involved from the start in the attempt to negotiate a settlement of recoverability-related issues, I have been interested to see that attempts somehow to sustain success fees at totally unreasonable levels have been so clearly quashed.

It was instructive to witness the demolition of the 20% uplift idea and arguments that success fees before the protocol period with a 5% uplift were far too high, so the starting point should be nil.The legal profession must now look further afield than CFAs if it wants to provide the public with legal solutions that are palatable to its own practitioners and defendant insurers.Firms must establish deeper and better relationships with after-the-event insurers for both sides' costs and providers of working capital.

There is now an urgent need to fill the enormous gap created by the scaling back of legal aid.

And there must be wider security for the firm itself as far as the costs for both personal injury and commercial matters are concerned.This is the death knell for large success fees and possibly for CFAs in personal injury matters.

It is time law firms faced up to reality.Bob Gordon, Director, Greystoke Legal Services Ltd