CFA guidelines will make business pay

Proposed new measures from the Government making it cheaper for claimants to pursue “no win, no fee” claims will be a huge financial burden to business, claims a top personal injury defendant lawyer.

Changes to the conditional fee system come after a consultation exercise involving consumer groups, trade unions, judges, insurers and other interested bodies such as the Civil Justice Council.

The Lord Chancellor, Lord Irvine believes the extra expense of a conditional fee agreement should be met by the losing party, rather than from the damages or the winner’s pocket.

But Tania Sless, personal injury partner at Beachcroft Wansbroughs, says that the changes will mean greater expense for insurers and businesses and that small claimants will be more tempted to pursue their grievances.

She says: “There will be less element of risk for the claimant, and they will stand to receive much more.

“I can imagine solicitors saying to clients that their share of the possible compensation could be much greater. Clients will be more likely to sue.”

However, she adds that once legal aid is abolished for personal injury claims, the very speculative cases will disappear as solicitors will not want to assume the risk.

Thompsons partner Tom Jones says the legal profession will have to offer the value for money that consumers expect. “Trade unions have been offering legal advice at a low price for years, and this will help the legal profession to see it must do the same,” he says.

Fraser Whitehead, partner at Russell Jones & Walker, agrees with Jones. But he adds: “We would have liked to see some more details and precise guidance about interpretation, but otherwise I feel very optimistic about this document.”

The measures, to be introduced in April, aim to increase fees and insurance costs that will be recoverable from the loser. It will make it easier to bring a case which does not involve a claim for money, and will make CFAs and after-the-event insurance suitable for defendants.