Legal Cost Specialists

Contingency Fees

The past year has seen a plethora of announcements as to major reviews into the future of the legal costs system. However, given the damp squib that emerged from the new Claims Process proposals one does wonder whether the current Government really has any appetite for a major overhaul of the system.

Nevertheless, one of the recent reviews undertaken considered the radical possibility of shifting to contingency fees. The study was undertaken by Professor Richard Moorhead and Senior Costs Judge Peter Hurst. The overall conclusion was that this represented a viable alternative to the current system. It was recognised that there was some unpredictability as to what impact this would have on “access to justice”, in particular in relation to lower value claims. The review did not actually recommend a change to a contingency fees but rather suggested it would represent a possible alternative if the current CFA system failed following a collapse in the ATE market. However, following the Court of Appeal’s decision in Rogers v Merthyr Tydfil CBC [2006] EWCA Civ 1134, which largely gave ATE insurers a blank cheque as to what level to set their ATE premiums, there seems to be little immediate danger of such a collapse. Even so, when the Senior Costs Judge is willing to consider such radical proposals it does reveal the extent of the concerns about the operation of the current system.

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