Phillips: recovery is the problem

An end to recoverability in conditional fee cases and a limited form of contingency fees could go some way to relieving the current funding mess and cut down on 'unproductive and wasteful' satellite litigation over costs, the Master of the Rolls suggested last week.

Speaking at the Association of Personal Injury Lawyers (APIL) conference in Birmingham, Lord Phillips of Worth Matravers said provisions in the Access to Justice Act 1999 which had stamped out any kind of contingency fees may have contributed to escalating 'skirmishes' over costs.

'What we had [before 1999] was a form of restricted contingency fee,' he explained.

'This was capped to 25% of the damages but paid for out of the recovery - the uplift - by the client.

I am inclined to think that what has gone wrong since then is the shifting of this recovery element to the defendant.'

Lord Phillips slated the escalating satellite litigation as 'unproductive, a terrible waste of money and reflecting a considerable blot on our civil justice system.'

APIL vice-president David Marshall said he was surprised by Lord Phillips' views, but doubted that they would appear on the government agenda.

'I think that [contingency fees] would happen over [Lord Chancellor] Lord Irvine's dead body,' he said.

Lord Phillips also expressed concerns that the risk of litigation was increasingly influencing decision-making and that the UK was veering towards a US-style compensation culture.

'Schools won't have a see-saw in the playground because of the risk of someone falling off and getting injured,' he said.

However, APIL president Patrick Allen warned there would be fewer personal injury firms around to take cases if the funding problems were not solved soon.

He said it 'defied logic' that insurers were offering 5% success fees for all cases settled pre-issue, no matter how complex.

'Put this together with the technical challenges on the wording of CFAs and we have chaos,' he said.

'No cash flow for solicitors means that some firms may go to the wall or give up the work.

This has implications for access to justice.'

Paula Rohan