Support remains sharply divided on whether solicitors should be free to contract with clients in whatever way they want – including agreeing to contingency fees.

At a debate last week between leading practitioners, third-party funder Susan Dunn said contingency fees should be an option to fund litigation, accompanied by regulation to avoid abuse and unfair prejudice to the defendant.

Dunn, of Harbour Litigation Funding, pointed to the Canadian system of contingency fees, where the ‘loser pays’ rule provides a brake on any excesses. She was speaking in favour of a motion ‘The time for contingency fees has arrived’, at a London debate organised by the Commercial Litigators Forum.

Also speaking in favour was Matthew Collings QC, of Maitland Chambers, who argued that while conditional fees – which are effectively contingency fees – have produced some difficult conflicts of interest, the profession is learning to cope. In any case, these are balanced by the need for access to justice, he said. ‘If further funding reform brings just one more bona fide case to court which otherwise would not or could not be brought – win or lose – then it’s worth doing.’

On the other side, Laurie West-Knights QC, of Hailsham Chambers, said he was content for big companies to arrange their affairs as they see fit. But the broader use of contingency fees in England is a short-sighted political expedient designed to save the government money, he argued, to the detriment of the legal system and society.

West-Knights said the best option is to revive the legal aid system, improving it so that it could assist those with middle incomes as well as the poor.

John Fellas, partner at US firm Hughes Hubbard & Reed, told the audience of around 150 lawyers that contingency fees have been criticised in the US for benefiting lawyers more than clients and for serving ‘as an incentive to engage in abuse’.

By prohibiting contingency fees in criminal and divorce work, the US is in some sense ‘acknowledging that there was a risk of abuse’, he said. However, it is prepared to tolerate that risk in the civil context, in part because litigation is viewed as a method of social regulation.

A straw poll of the audience showed a roughly even split for and against the motion.