Jackson opposition
Lawyers acting for 18 claimants who won a landmark negligence claim against Corby Borough Council have slammed Lord Justice Jackson’s proposals to move away from the conditional fee agreement (CFA) regime.
Des Collins
Collins Solicitors partner Des Collins represented the 18 young people who were born with deformities after their pregnant mothers lived near a contaminated council site. Collins claims the case would never have been launched if they could not have relied on CFA funding.
Old Square Chambers’ barrister David Wilby QC, who was instructed by Collins, agrees: “If you took away the CFA regime nobody would do these cases,” he says.
Earlier this year Jackson LJ proposed the overhaul of the CFA structure as part of his review into civil litigation costs (25 January 2010). He recommended abolishing the recoverability of success fees in CFA cases.
Collins argues that without the promise of a success fee on the condition that they won the case, his firm would not have been able to back the Corby group action for the 11 years it took to get the ruling.
The Corby group claimants were aged between 11 and 23 years-old. Their families launched a claim against the council in the late 1990s alleging that toxic dust from a former steelworks in Corby had caused birth disabilities to the young claimants.
The High Court found the council negligent in its management of waste at the site during the 1980s and 1990s. The council had denied it was negligent or that there was a link between the waste removal and deformities affecting the children’s hands and feet (3 August 2009).
There were fears the local authority would appeal the ruling and drag the battle out for several more years, but after a week in mediation earlier this month a compensation settlement was agreed behind closed doors.
Initially the group had attempted to gain funding for their claim through the Legal Services Commission (LSC). Not all the claimants were successful in getting legal aid, but for those who were the LSC put the case out to tender. Raleys Solicitors won the instruction.
Collins says he was concerned about the prospects of the case. “We felt very passionately about it,” he says. “We thought the children’s interests would be lost unless someone bounded the cases together.”
This left the claimants with a choice: proceed with half receiving legal aid or choose Collins and go back to the LSC. They chose Collins.
They made another application for legal aid for the remaining 10 claimants who had initially been unsuccesful, but were told by the LSC that first they had to attempt getting an after-the-event (ATE) policy in the open market.
“The system worked entirely against them,” Collins says. “On every level it was a David and Goliath battle, they had no machine to back them up.”
Against the odds, they were successful in getting an ATE policy - unlike the council, which is understood to have no legal expenses insurance in place.
The legal expenses market has matured, says Collins, and insurers are sophisticated enough to be able to underwrite complex long-running class actions. The prospect of recovering a healthy success fee underpins this market.
Collins suggests that by removing the uplift Jackson is effectively “closing down opportunities for people who work on CFAs”. He adds: “The only way we survived was by saying that we had a cashflow in fees.”
Wilby underlines the point: “CFAs were sold as a substitute for legal aid. Jackson’s contemplating a situation where claimants will have to put their hands in their own pockets. That’s morally wrong.”
Jackson’s report highlighted inefficiencies within the litigation system, but many are concerned that attempts to rectify that have tipped the balance too far in the defendant’s favour. This is one case that demonstrates how CFAs can be used to facilitate access to justice.
Claimant: Collins Solicitors partner Des Collins instructed Old Square Chambers’ David Wilby QC for Corby group litigation
Defendant: Berryman Lace Mawer partner Paula Whittell instructed Stephen Grime QC of Deans Court Chambers and Charles Utley of 42 Bedford Row for Corby Borough Council
Readers' comments (9)
Anonymous | 21-Apr-2010 1:52 pm
I entirely agree with David Wilby QC. The effect of removing the recoverability of success fees from the opponent and reducing the success fee payable by the client appears not to have been fully thought through by Jackson, or this effect has been under-estimated. Claimants will get less damages and some claimants will not get a solicitor to take on their case at all. If the new Government implements this they should call the new statute the Prevention of Access to Justice Act 2011.
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Anonymous | 21-Apr-2010 2:38 pm
The introduction of CFAs created a flawed system of civil justice because the concept of "no win no fee" was interpreted by many speculative Claimants and solicitors as "take a punt because you have nothing to lose". Taken together with easy access to CFI policies that were frequently paid for by high interest loans, it allowed The Accident Group and others with a similar business model to encourage vulnerable individuals to pursue spurious claims, causing Defendants to spend a great deal of money - often unrecoverable - in trying to defend them. The succesful Claimants also were occasionaly left worse off after their experience of pursuing a claim, with their liability to pay unrecoverable interest on the loans to pay their CFI premium being greater than their awards of compensation.
The proposed reforms would just make a bad situation worse. In effect it would create a system of contingency fees while doing nothing to remove the "nothing to lose" ethos that we have seen in recent years.
The system does need to be reformed, but in a way that affects the availability and cost of conditional fee insurance, rather than in the removal of the success fee.
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City Gent | 21-Apr-2010 4:16 pm
I tend to agree with Anon 2:38. Whilst there may be the odd case like this where CFA's do provide access to justice they are more than cancelled out by the thousands of cases where CFA's and ATE insurance at ruinous premiums are effectively used as a form of extortion.
Many defendants settle CFA financed cases not because they are genuine and deserving cases but because they can't take what may be only a very minor risk of losing and getting wiped out by a costs order allowing fees of £500 an hour or more.
It's never healthy to offer something for nothing, but that's precisely what the current CFA regime does. To someone on a low income the prospect of a couple of thousand quid for pretending to have been injured is an irresistible temptation.
CFA's are an open invitation to fraud, and there are all too many bent claimants and bent solicitors willing to get their snouts in the trough. The sooner Jackson's reforms are implemented the better off we'll all be.
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Anonymous | 22-Apr-2010 3:55 pm
Vote Conservative, as they are the only party opposed to the Jackson review and Jack Straw's campaign against Claimant lawyers.
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Don't vote Conservative | 22-Apr-2010 4:57 pm
Re Anon 22-Apr-2010 @ 3.55pm;
I think you'll find that shadow justice minister Henry Bellingham hailed the Jackson report as a ‘remarkable magnum opus’. At least Jack Straw is only talking about implementing parts of it.
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John Walton | 25-Apr-2010 5:08 pm
It makes you wonder what has initiated this 're-think'... At a time when payouts are very precisely worked out and often structured specifically to the care needs of claimants, to then say 'but 25% of that has to subsequently be taken away, even though you won', just doesn't make sense.
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Anonymous | 26-Apr-2010 1:52 pm
Jackson does not have any relevant experience in most of the aspects of litigation funding in which he is dabbling.
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rdh | 28-Apr-2010 12:11 pm
The last person who should be undertaking a review of the CFA system, or indeed any aspect of the costs system, is a senior judge. As Anonymous 1.52 points out, first they have no idea what they're talking about and secondly the hostility of the Court of Appeal in particular to CFAs has long been apparent.
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mjb | 28-Apr-2010 11:10 pm
From a commercial / property litigator's perspective, the Jackson review is a farce. Rather than meddling with what the Court awards and messing around with justice, why not cap the recoverable success fee at a lower percentage, produce a formula for capping recoverable insurance premiums and get a proper grip of recoverable hourly rates. The heart of the real complaint is that Claimants' lawyers are milking it which, for a variety of reaons, is absolute nonsense. Let Jackson litigate for years without pay and see how he feels when he gets a trifling reward.
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