The US style of paying lawyers by contingency fees is growing in the UK, as what is believed to be the fourth firm begins working on this basis
Contingency fees – where fees are charged as a percentage of the value of the claim but only paid if successful – are increasingly popular in the UK as doubts are raised about the effectiveness of conditional fee arrangements (CFAs). Although Law Society rules bar English and Welsh lawyers from acting on a contingency fee basis, lawyers can get around the rule by taking themselves off the solicitors’ roll.
The main attractions are the potentially massive remuneration and the high-volume work with which contingency fees are often associated.
Chris Beesley, co-chair of Ince & Co’s admiralty business group, has launched Incite Claims Management, a company that now charges between 10 and 35 per cent of a claim’s value. In one of his first cases he was paid $7,500 (£4,800) for just 45 minutes work while working for a 15 per cent cut.
A lot of Beesley’s claims arise out of ship arrests, and as he is not a lawyer he is limited to only carrying out negotiations. Once lawyers are required the matter is transferred to Ince & Co, which later bills Beesley, who pays the firm out of his winnings. Beesley continues to work out of Ince & Co’s offices, where he has worked for the past 30 years.
Philip Bush, a former partner at London shipping firm Jackson Parton, has taken his name off the solicitors’ roll in order to set up the UK Mercantile Contracts Enforcement Agency, through which he receives instructions on a contingency fee basis. Although Bush initially expected to do mostly small ship claims, his work has blossomed into personal injury and claims relating to non-payment of commercial debt.
Bush carries out the work until court stage, at which point he refers it to Jackson Parton, which he instructs on a CFA basis if it is UK-related, or to foreign firms if it is overseas-related. He pays foreign lawyers out of his own pocket if the jurisdiction has not implemented CFA regulations or if contingency fees are unlawful.
A lot of Clyde & Co’s cargo recovery work on behalf of insurers against shipowners is done on a contingency fee basis, for which it uses non-lawyers until the litigation stage. Senior partner Michael Payton, who said that this arrangement is particularly popular with Japanese clients, said the firm has considered widening the range of work done on this basis.
It is also understood that London shipping and international trade specialist firm Thomas Cooper & Stibbard has an arm to handle contingency fee work. The firm was unavailable for comment as The Lawyer went to press.