Analyse the Advantages and Disadvantages of Conditional Fee Arrangements for Legal Aid.

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  • Topic: Contingent fee, Fee, Lawyer
  • Pages : 5 (1768 words )
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  • Published : May 3, 2011
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The legal aid system was introduced under the Legal Aid and Advice Act 1949 after the World War 2 which aim as explained by the government was “ To provide legal advice for those of slender means and resource, so that no one will be financially unable to prosecute a just and reasonable claim or defend a legal right and allow solicitors and counsel to remunerated.” The Legal Services Commission runs the legal aid scheme in England and Wales which was established from AJA 1999. Since the implementation of the Access to Justice Act 1999 which was designed to enable the implementation of a reformed scheme to meet the governments objective to promote and develop legal services that can be delivered within a controlled budget and targeted according to need, there was another 2 scheme was introduced , The Legal Services(for funding civil cases which are still allowed aid by the state) and the Criminal Defense Services(for criminal legal aid). However from the point of view of the state, the legal aid scheme had a large number of weaknesses in terms of the increasingly heavy burden imposed on the treasury that the Lord Chancellor’s department had set out to implement a major cost cutting drive. The main problem for the government is cost the Civil Legal Aid will only be allowed for family, housing, immigration and medical negligence cases while personal injury, disputes about inheritance and intestacy, trust matters, company matters, land and boundary disputes and cases pursued in the course of business will be funded under the Conditional Fee Agreements.

Conditional Fees were first introduced by the Thatcher Government in the Courts and Legal Services Act 1990, though it took another five years before they became operation. Under the legislation1 and the regulations2 it became awful for a solicitor to agree with his client that in the event that the case was won he could charge a client a success fee of up to 100 percent of his cost. The legislation legitimated ‘no win, no fee’ arrangements that would otherwise have been unlawful as contrary to the fundamental rue of banning any arrangement that made the lawyer’s fee dependent on the outcome of the litigation. If one considers just the case itself, the success fee is pure profit. But success fees must also cover the losses incurred in the very small minority of cases that are unsuccessfull.

To support this new form of funding of civil litigation the insurance industry started to develop products to enable the claimant to cover himself against the risk of losing and having to pay the other side’s costs. And then to cap it all, in 1999 lord Irvine’s Access to Justice Act made both the success fee4 and the insurance premium5 recoverable by the successful litigant.

This new scheme, The Conditional Fees Arrangement is of advantage to the client as per said in the The English Court of Appeal in Awwad v Geraghty & Co It does not, on its face at any rate, increase the potential liability for costs of the client’s litigation opponent should he in due course be ordered to pay the costs of the litigation as per the decision of Sarwar v. Alam and Designers Guild v. Russell Williams, where the court allowed a claim of a hundred percent success fee and justified it with the recognition that in these particular cases the solicitors had undertaken a substantial risk in entering into Conditional fees Agreement. It is of potential advantage to the litigation opponent of the client in that, if such opponent is awarded costs against the client, the client’s assets from which those costs must be taken will be larger because they will not have been diminished by costs owed to the client’s own lawyer. The agreement does not involve any division of the spoils in the way that a contingent fee agreement does and in the way in which, arguably, a conditional uplift fee agreement does (since the winnings produced by the litigation will produce or swell the assets from which the uplift...
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