Ken Clarke to announce plans to overhaul "No win, No fee" arrangements
Today, it is reported that Ken Clarke will announce plans to the House of Commons to overhaul "No win, No Fee" arrangements. The "No win, no fee" system was introduced in the 1990s because the Government withdrew legal aid for personal injury cases. It currently works in a way which provides access to justice for anybody who is injured.Mr Clarke's announcement is expected to represent a shift towards a US-style system where some of the legal fees will be deducted from the winning Claimant's damages rather than being paid for by the losing Defendant. Is such a move right or wrong?If lawyers don't generally have a good name, there is even less fondness generally for "money-grabbing", "fat cat", "no win no fee" lawyers. The insurance industry, with the assistance of the government and the media, have propagated the myth that "no win no fee" agreements have fuelled the "compensation culture" and caused legal costs to rocket. The truth is that "no win no fee" agreements have provided a good means of access to justice for those who would not otherwise have been able to seek redress.The truth is that there is no evidence that "no win no fee" agreements have led to a growth in Claimants bringing unmeritorious claims - in fact, they discourage such cases, since a solicitor will not be paid if the case does not succeed. The truth is that if a "no win, no fee" claim does fail, the Defendant usually recovers their legal costs in full. The truth is that the cost of litigation can be high with or without "no win, no fee" agreements - it is generally agreed across the industry that legal costs are behaviour driven. The truth is that every day defendants (usually insurance companies, or public bodies, such as the MOD and NHS) are throwing good money after bad on legal costs, simply because they fail to get to grips with, admit liability for, evaluate and settle claims before significant costs (on both sides) are incurred.The truth is that the "success fees" incurred in the "no win no fee" cases do not line the pockets of "fat cat" lawyers, but subsidise more complex cases, which might not otherwise be pursued.The truth is that the expected announcement will have a significant adverse effect on both access to justice and the net amount of compensation a winning Claimant receives. Coupled with the Coalition Government's desire to axe the availability of legal aid for the vast majority of civil claims, the overhaul of the "no win, no fee" system will reduce and restrict access to justice for all but the wealthiest in our society.