The Advantages and Disadvantages of Conditional Fee Arrangements for Legal Aid

Topics: Contingent fee, Champerty and maintenance, Fee Pages: 7 (2306 words) Published: March 10, 2013
Common Law Reasoning and Institutions

Essay Title: Analyse the advantages and disadvantages
of conditional fee arrangements for legal aid.


"It does exactly what it says on the tin." This is the kind of slogan which some solicitor firms or claims management companies used to promote the conditional fee arrangement [1]. However, doubts were cast over whether conditional fee agreement really does what it says on the tin in practice and the issues brought about by the conditional fee arrangement have been debated over the last decade. This research essay seeks to critically examine the pros and cons of conditional fee arrangement for legal aid in the English Legal System.

Section 58 of the Courts and Legal Services Act 1990 [2] first introduced conditional fee arrangements, also known as ‘no win, no fee’ agreement. By virtue of section 58(10) of the Act, the arrangements cannot apply to criminal cases, family cases and or those involving children [3]. This Act came into effect in June 1995. Later, Section 27 to Section 31 of The Access to Justice Act 1999 [4], together with the Conditional Fee Arrangements Regulations 2000 and the Collective Conditional Fee Agreements Regulations 2000 reformed the law mainly to allow the recovery of success fee from the losing party [5]. However, the rules became too complex resulting in satellite litigation. As a result, the two Regulations were revoked by the Conditional Fee Agreement (Revocation) Regulations 2005 to remove unnecessary regulation and simplify the arrangements [6].

In this type of funding, the solicitor is compensated only if the claim is successful. He is also entitled to an uplift, known as the success fee, which can be 100% of the lawyer’s nominal fee. All fees including the basic fee, success fee and disbursements, such as court fees, are usually paid in whole or part by the losing party. However, the winning party is still liable to pay his solicitor for any costs that the losing party is not ordered to pay [7]. In case if the claimant fails, the claimant does not have to pay his own solicitor, but may still have to pay the costs of the winning party and the disbursements incurred by his own solicitor. However, the claimant’s solicitor normally arranges insurance to cover this risk, which is known as ‘before the event’ insurance or 'after the event' insurance. The claimant may have to pay the insurance premium out of his own pocket or apply for a bank loan beforehand.


Conditional fee agreement was introduced as an alternative method of funding litigation. It had extended access to justice for those who could not afford to pursue litigation and who are not eligible for public funding.  From 2000-2005 alone, personal injury cases saw a jump in a million consumers seeking redress through conditional fee agreements [8]. This was likely because of a few reasons. For one, the strict means test introduced by the Access to Justice Act 1999 had excluded the middle income group from legal aid, but this group was not able to afford legal services either. Secondly, the Access to Justice Act 1999 had taken away certain types of civil cases, such as personal injury, from its funding. Thirdly, claims management companies had been actively educating the masses as to seeking redress especially for personal injury cases, thus promoting an overly litigious culture with conditional fee arrangement as an avenue that the people can do it for free. Take road traffic accidents as an example. Sometimes the legal cost was not proportional to the amount of damage that may be covered. However, with conditional fee arrangement, access to the court was made possible without the burden of bearing those legal costs. Conditional fee arrangement has increased accessibility to justice in a way that legal aid with a budget can never provide. There is no doubt that access to justice has been made...
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