The Ministry of Justice (MoJ) will unveil plans to reform the conditional fee system later today.
Justice secretary Kenneth Clarke said the move comes in response to an explosion in legal fees sparked by the current no-win, no-fee regime.
He told BBC Radio 4’s Today programme: “Businesses find it very expensive and particularly the NHS, which pays out a fortune in lawyers’ fees every year because of the way it’s been changed. We’re not getting rid of no-win, no-fee; we’re going back to the way in which it started in the 1990s.
“There were changes made in 1999 to make it more attractive and they unfortunately have gone too far, they’ve led to an explosion in the costs.”
It is expected that the MoJ will announce plans to adopt a contingency fee system to allow lawyers to take fees from the claimant’s settlement rather than entirely from the losing side.
The MoJ launched its consultation on civil legal fees in November in response to a report published by Lord Justice Jackson in January last year (18 January 2010).
Lawyers were given until February to respond to the consultation.
Edwin Coe partner David Greene, a lawyer who specialises in collective actions for shareholders and consumers, commented: “It seems quite extraordinary that the Government has responded to the consultation on the civil costs regime on which, with the legal aid consultation, there were a record number of responses within a very short period after closure of the consultation.
“It hardly gives confidence in the veracity of the consultation process. We shall see what’s recommended but it seems highly likely that the Government will carry through a plan to restrict access to the courts that claimants have through the current costs regime.”