Just Reward?

This study of conditional fee agreements undertaken by the University of Westminster, part funded by the LCD, identified the inherent conflict of interest between solicitors and their clients in that solicitors are encouraged to overestimate the risks of a case so they may justify a high success fee. It found that clients lost an average of 15 per cent of their damages to their solicitors in success fees and other payments. The mean value for a success fee was £696. Although 93 per cent of cases were successful, the average success fee was 41 per cent, while a success fee that correctly reflected a 93 per cent success rate should have been an average of 8 per cent. It was clear that solicitors were only prepared to take on cases which they knew they could win. The study did not provide information on the percentage of people who were refused conditional fee agreements. The high risk of losing, the prospect of low damages and disproportionate disbursements were the usual reasons given for not acting under a CFA. There was no set method for calculating a success fee which meant it was very difficult for the client to come to an independent view on whether the success fee was based on reasonable assumptions. The lack of transparency made it harder for clients to compare the cost of this method of funding. The report called for the government to re-examine its reforms and to evaluate the effect of the removal of legal aid from most personal injury cases.