Barristers out of pocket on CFAs

Barristers’ fees have dropped significantly in conditional fee arrangement (CFA) work even if they are winning the bulk of their cases.

The Lawyer has obtained details of a report’s mid-stage findings which claim that barristers are faring badly in terms of fees and control over cases. The findings appear at a time when senior barristers are accusing solicitors of over-hiking the level of success fees.

The research by Manchester set 28 St John Street, which claims to have handled more CFA cases than any other UK personal injury (PI) set, shows that barristers’ fees have decreased 10 per cent on the amount they would have received under standard fee payments.

The report’s author, PI barrister James Rowley, who sits on the Bar Council’s CFA panel, says: “We have made a loss, in broad terms, of 10 per cent of base fees by sticking to the solicitors’ uplift, even though we actually won 62 per cent of the cases.”

The research claims barristers run far higher risks than solicitors of not making profits, particularly as so many cases settle before trial, leaving barristers out of the money-earning loop. Rowley says: “By contrast, the solicitor will have generated substantial costs and uplift to set aside, even if the case settles before trial.”

The research, to conclude in September, was based on the analysis of 500 CFA cases carried out by the set between January 1998 and August 2000.

The set’s senior clerk Mike Fry says that barristers are under pressure to accept cases to save losing the faith of their longstanding clients.

Frances McCarthy, president of the Association of Personal Injury Lawyers and PI partner at Pattinson & Brewer, says: “Barristers have less control over cases and have to accept solicitors’ words on trust. They have less involvement, so when they reach court they see solicitors should have done certain things which they haven’t. They would prefer to review the case earlier.”

Serle Court’s Richard Southwell QC, who chaired a working party on CFAs for the Society for Advanced Legal Studies, says: “The Manchester set’s figures do not surprise me. I have not found a single barrister in Lincoln’s Inn in favour of CFAs.”

He says that many law firms, “ranging from the very wonderful to the not-so-good”, are receiving substantially higher profits as a result of CFAs.

“They ensure the uplift is sufficient to ensure that they gain a profit overall. The solicitors’ forecast is regularly too gloomy, so the uplift [or success fee] is too high and solicitors make larger profits than they should.”

A further report, ‘Just Rewards’, due to be published by former University of Westminster researcher Stella Yarrow, evaluates CFA cases to date, following a postal study published in 1997 by the Policy Studies Institute. Southwell, who claims to have seen drafts of the early work directed mainly at solicitors, says: “In parts of the report, we saw that solicitors are thought to be inadequately trained in risk assessment. There is a need for further training and it is important that solicitors should introduce training of those coming into the profession as part of their Continual Professional Development.”

Rowley says: “I suspect, but do not know, that the University of Westminster survey will conclude that the bar has been poor at risk assessment, but that will not be the position in the near future.” He points to a software programme under development to help barristers analyse perceived risk.

But matters do not look altogether bleak for barristers, who can choose to be instructed in the traditional way or through CFAs.

McCarthy says: “Barristers can make their own uplift so in court the barrister can see that there is a good defence and decide that the 70 per cent risk of losing is too low and therefore, increase the uplift.”

Barristers argue solicitors have greater say in the uplift. But in terms of lost earnings, solicitors face losing three years of work while barristers lose only the time they spent in court.