What do success fees pay for?
The other day I posted a somewhat tongue-in-cheek comment about how the need for success fees could be avoided if claimant lawyers stopped bringing bad claims. However, there was meant to be a serious point underlying it.
APIL’s opposition to the Jackson proposals to end recoverability of success fees can be seen from APIL’s president Muiris Lyons comment:
“How can it be fair and just for someone who is suffering because of another person’s negligence to have to pay towards putting things right?”
This question, and the issue of recoverable success fees, of course begs the following questions:
“How can it be fair and just for someone who is not suffering because of another person’s negligence to have their costs of pursing a misconceived claim paid for by another party?”
“How can it be fair and just for someone (Party A) who has caused suffering to Party B to be forced to pay to towards the legal costs of Party C who has suffered an injury but as a result of an accident unconnected with Party A’s actions and incurred in the process of a failed claim against Party D?”
Traditionally, legal claims were paid for privately. If a party was able to persuade the other side or the court they had a good claim then their legal costs were paid for by the negligent party. If a party failed in their claim, they paid their own costs (and those of the party they had “wrongly” pursued).
Legal aid transferred the costs of the “bad” claim from the individual who brought the “bad” claim onto the tax payer. Or, arguably, enabled some “good” and “bad” claims to be brought that might not otherwise have been brought at all.
The previous Government’s decision to introduce recoverable success fees transferred the costs of “bad” claims from the tax payer or the individual (often regardless of the ability of the individual to fund the claim privately) onto negligent defendants. Party A, who has negligently injured Party B, has to pay the costs of Party B and also (via the success fee mechanism) the costs of Party C bringing a “bad” claim against Party D.
Recovery of success fees does not pay towards “putting things right” for a person who is suffering because of another person’s negligence. That is paid for by ordinary costs shifting. Instead it pays for the costs of bringing “bad” claims. Success fees pay for claimant lawyers bringing “bad” claims.
Any system other than straight private retainers is about producing a system whereby the cost of “bad” claims is shifted from the person making the “bad” claim elsewhere.
There may be very good reasons for this shifting of costs but the claimant lobby does no favours for itself by trying to paint this as being a simple black and white issue.
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