Is it true that only high risk work will be left for barristers as solicitors retain all the “dead certs', or is it just paranoia? asks Shaun Pye.
If you want to know how conditional fees will affect solicitors, you can read last year's Policy Studies Institute report into how law firms are conducting “no win, no fee” work.
The report was commissioned by the Lord Chancellor, Lord Irvine as has a second report on conditional fees being written by KPMG, the brief being to suggest ways in which law firms can adapt their practices to cope with more “no win, no fee” cases.
However, if you want to know how conditional fees will affect the Bar, the reading list is a bit shorter. One half expects to find a few sums scrawled on the back of an envelope and a note to ministers: “Re: the Bar just play it by ear.”
Barristers simply do not know what is going to happen. Dan Brennan, vice-chairman of the Bar Council, says there has been a lack of consideration of the role of counsel.
“Government proposals appear to be geared to the business approach of solicitors, not the Bar. The consultation paper makes no specific reference to the role the Bar is expected to play.”
For example, the Bar wants clarification as to whether counsels' fees under conditional fee arrangements will be treated as disbursements, or whether counsel will be expected to share the risks and work on a “no win, no fee basis”.
With little guidance from the Government, the market will decide. And, although there are already some “after-the-event” insurance products on the market which cater for counsels' fees, lawyers from both branches of the profession believe barristers will be expected by solicitors and their clients to take on work on a conditional fees basis.
“Why should barristers be treated differently to solicitors?” says Michael Napier, senior partner at Irwin Mitchell and author of a Law Society book on conditional fees.
“The whole idea is that a client and lawyer should have the same interest, and that includes the advocates,” he says.
One practice manager of a large London set says his experience is that barristers who have been involved in conditional fee cases over the past two years have very rarely been offered a fixed fee.
In the Bar's most pessimistic vision described as “paranoid” by Napier solicitors will retain all the “dead cert” conditional fee cases in-house, so barristers will find themselves being offered work only on the riskier cases. Two or three consecutive losses and a barrister could face economic disaster.
The Government says that banks and insurers will develop “stop loss” products to protect lawyers from losing a string of cases. But Brennan says such products are currently aimed only at solicitors.
“I'm not aware of any being developed which fully involve the Bar.”
And change will not be restricted to common law sets. Paul Shrubsall, senior clerk at 1 Essex Court, says: “We're not complacently assuming the commercial Bar will be immune from conditional fees.”
Commercial clients may not instruct on a pure “no win, no fee” basis, but he suggests they will want to pay reduced fees with an uplift for success,
How are barristers going to survive in this new climate? They will certainly have to surrender some of their cherished independence. Bill Harris, senior clerk at 2 Gray's Inn Square, says that, for the first time, “clerks will ask barristers how they got on before handing them the next brief”.
The practice manager at Doughty Street Chambers, Christine Kings, says risk assessment of conditional fee cases is “too important to be left to individuals”. Bad results could be disastrous for chambers. Also, a barrister taking over a case from a colleague must have confidence in the initial risk estimate. Committees will make the decisions.
The spectre of full and formal partnership between barristers looms. Some chambers, such as Hardwicke Buildings, already have already formed groups of barristers, who have agreed to pay a proportion of any success fee into a fund, indemnifying the others against losing cases.
Of course, partnership is not permitted by the Bar's code of conduct, but the Bar Council will probably be forced into considering whether a change in the rules may be necessary.
After all, one hallowed tradition the “cab rank” rule already no longer applies for conditional fee cases.
There is still a great deal of confusion and uncertainty about how the Bar will fare under Lord Irvine's reforms, but most lawyers agree that conditional fees will transform life at the Bar.
“It's the biggest cultural change at the Bar since the introduction of legal aid,” says Kings.
And, as with every major change, there are bound to be casualties.
As one senior clerk explained: “It is very likely the Bar will split down the middle into those sets which are taking conditional fees seriously, and those with their heads in the sand.”