Law Soc calls for contingency fee legalisation after High Court case

The Law Society has called on the Lord Chancellor, Lord Irvine to legalise contingency fees – currently unlawful except where stipulated in the legislation allowing for conditional fees – in the Access to Justice Bill, following a “surprise” High Court ruling.

On 9 February the High Court ruled that Birmingham firm Sydney Mitchell had acted unlawfully by representing a Kingston upon Hull City Council tenant in a statutory nuisance case on a no win-no fee basis.

But in the Thai Trading v Taylor case in February, the Court of Appeal had previously ruled that contingency fees were no longer contrary to public policy as long as there is no uplift. In June, the Law Society Council decided to allow contingency fees where permitted by statute or common law.

Thai Trading has been referred to the House of Lords and a decision is expected soon. A Lord Chancellor's Department spokesman said Lord Irvine was due to approve or reject the Law Society Council decision “imminently”.

Head of solicitors' remuneration, David Hartley, said: “Appeal Court cases are pretty authoritative and people will now wonder where they stand. If the Government doesn't clarify this in the Access to Justice Bill, we will be tabling an amendment. Solicitors are shouldering the risk with these cases because no legal aid is available for these type of cases.”

Kingston upon Hull City Council has subsequently accused solicitors of “systematic canvassing of tenants to generate cases”.

Sydney Mitchell partner Ron Halstead said he had not intended to charge an uplift fee, had been confident of success, and argued he had brought the case, Hughes v Kingston upon Hull City Council, before the Lords appeal of Thai Trading began.