As many will be aware there is a Bill currently going through the House of Lords whereby the Government is proposing a complete overhaul of Legal Aid, which will also include changes to “no win-no fee” agreements.
On the 1st April 2013, the Government is proposing to discontinue Legal Aid for personal injury and medical negligence claims and therefore any claims to be made will have to be either privately funded or under some form of insurance policy namely a Conditional Fee Agreement (CFA), also known as a “no win-no fee” agreement. This all sounds pretty simple but in the overhaul of Civil Legal Aid there are also changes to be made to the CFA. This will include the abolishment of CFA’s and the introduction of Collective Conditional Fee Agreements (CCFA). Under these new Agreements, the Government is proposing that Solicitors can charge no more than a 25% success fee and that the Claimant will be responsible for these costs from their damages. This could mean that Solicitors may be unwilling to take on claims under a CCFA unless they can be certain of a substantial win. The Government justified the removal of Legal Aid for personal injury work on the basis that access to justice was preserved by a readily available system where lawyers would take on cases of all types and that the wrongdoer would pay the bill.
The Government is also proposing that this will cover all Agreements entered into prior to the 31 March 2013 and after the 1st April 2013. This in itself would appear totally unfair to the Claimant since the Defendant’s may string out the claim on the basis that they will not have to cover higher costs or, a Solicitor will rush through a claim in order to ensure their costs are covered and that the Claimant receives their damages in their entirety.
An amendment to this part of the Bill is proposed to be heard on the 20th March 2012 with the argument that non-payment of the success fee by the Defendant’s should only be relevant to those CCFA’s entered into on or after the 1st April 2013.
Is this just a case of the Government wanting to save millions that is currently spent on Legal Aid or, a way for insurance companies to make more money? Or, will it shoot both of them in foot and eradicate the “where there’s blame, there’s a claim” culture?