No win no fee lawyer news
16/06/2009

Legal fees under scrutiny as regulation looms

Government proposals to impose restrictions on no win, no fee solicitors who allegedly charge high success fees for winning legal actions are likely to be ineffective, it is argued.

Lawyers operating no win, no fee arrangements may do so using two different arrangements - conditional fees and damages-based contingency fees.

For the former, fees are based on work done, and for the latter, a percentage of compensation claims is paid.

Jack Straw, the UK government's justice secretary, has been scrutinising the system and is concerned disproportionately high fees can be set using the damages-based arrangement. He has announced plans to regulate in this area, an initiative which has been reported in the media as a crackdown on unscrupulous lawyers.

However, in a review of the issue covered by Personnel Today, doubts were expressed that claimants would enjoy any extra protection. Also, it was argued that exploitation of the system, if any, would be prevented by competitive market forces.

Clients considering engaging a no win no fee solicitor for personal injury cases often welcome the damages-based approach - and the arrangement has been shown to improve access to justice.