Lord Irvine's favourite set reveals CFA system flaws

A SET held up by the Lord Chancellor as a pioneer of controversial Conditional Fee Agreements (CFAs) in personal injury actions is now saying the system is flawed.

Number 1 Serjeant's Inn has taken on more than 100 cases on a conditional fee basis, which have highlighted two major potential conflicts of interest.

One tenant has lost three CFA cases in the past six months and is now wary of taking on any more.

Senior clerk Clark Chessis says: “The knock-on effect is that if he is involved in a CFA case and there are settlement negotiations, having lost three cases – however hard he tries to forget that fact – he is being put in an invidious position.”

Chessis says barristers will be torn between taking the safe option of an earlier, but potentially smaller, settlement for their client and risking their fees by gambling on larger compensation in court.

Chessis offers a potential solution. He says the uplift, or success fee, the plaintiff barrister will take on top of their normal fee, could be higher to reflect the fact that they risk losing money if they rigorously pursue a case.

“That said, it will not necessarily be acceptable to the lay client, and I'm not convinced that morally it's right.”

The second potential conflict arises when you have two barristers from the same set pitched against each other in a large personal injury case that will run for several days and involve significant amounts of money and resources.

Chessis says the high cost of the case means that, with one side losing, less money will come into the chambers.

“The defendant barrister has a vested interest in the plaintiff barrister not losing,” says Chessis.

He says this is an unforeseen result of the reforms that could be solved by barristers' fees being treated as a disbursement to avoid a conflict of interest.

In October, Chessis wrote an article in The Lawyer titled: “We're not afraid of CFAs.” Lord Irvine suggested to the House of Lords that the article was an endorsement of his policies – which infuriated the Bar Council.

However, Chessis warns that his chambers does not want to become a political pawn: “The article has been misconstrued by all parties.”

He says he simply wanted to highlight the potential pitfalls of CFAs.