Linklaters is to offer a no win, no fee deal for clients appealing pension decisions.
If the conditional fee scheme is successful, it is likely to spread to other areas of commercial litigation.
The move follows a change in legislation last year allowing firms to adopt contingency fee arrangements for civil cases. Before, it applied only to insolvency, personal injury, and human rights cases.
Consultant Mark Blyth, who heads the 10-lawyer strong pensions litigation group at Linklaters says: “No-one is using this system for appeals of Pensions Ombudsman decisions.
“This type of arrangement is being increasingly considered in all litigation cases. Linklaters is watching developments closely. We decided to target this area because it is suitable for it.”
He says appeals from the ombudsman to the High Court were chosen because they are shorter than other types of litigation and more predictable.
He says: “The appeals are only on points of law, not facts as well, so their merits can be more easily discerned. [Commercial litigation] procedures take years. But these take about six months.”
But Monica Coombs, head of pensions at Sacker & Partners, a leading firm in the field, thinks the no-win, no-fee scheme is not as beneficial to clients as it may seem.
She says: “Superficially it seems good for the client. But even if the client wins, the uplift in fees could cost the client more.” Fees are raised by up to 100 per cent.
She adds: “Not all of these cases are about money, some are about points of principle and in any event, costs are not always awarded to the successful party. Even if you win it does not mean someone else is going to pick up your fees.
“Another question is: who will pay for counsel?”