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GAZETTE
MWH
JUNE 1994
Constitutions, have been mounted in
most States of the US where caps have
been enacted and the challenges have
been upheld in two thirds of the States
where they have been heard.
Litigation in the United Kingdom
Over the last six months the long-
debated problem of access to justice
had received major attention in England
and Wales said
Michael Napier,
Chairman of the Association of
Personal Injury Lawyers in the UK, in
his address to the Conference on the
topic,'
Litigation in the UK - Has it a
Future?
It was a debate in which the
judiciary had become involved,
speaking out in favour of simplifying
litigation, reducing delay and cutting
costs. While these objectives were
desirable they would not, of
themselves, necessarily open the door
to would-be litigants, said Michael
Napier, noting that in 1979 80% of the
UK population was eligible for legal
aid but, in the wake of Treasury
pressure on the Lord Chancellor to cut
the rise in the legal aid bill, this figure
had been reduced to less than 50% in
today's terms.
Conditional Fees
The introduction of a conditional fee
system, due to commence next autumn,
would go some way to "plugging the
legal aid gap", said Michael Napier,
who explained that the conditional fee
system was different to the American
contingency fee. "The basic concept is
that in return for agreeing to charge the
client no fee if the case is lost, the
lawyer can charge the client a
success
fee
if the case is won. This is not a
percentage taken out of the damages
because the success fee is calculated as
an uplift on the solicitor's normal costs
for conducting the case. The solicitor
will recover costs as usual from the
losing defendant and the client will
simply pay the success fee on top. The
success fee can be as low as nil% or as
high as 100% of the 'standard' fee in
particularly risky cases. Unlike
contingency fees in the US, where the
lawyer's percentage of the damages is
usually around one-third, the
conditional fee agreement is more
flexible and will require the solicitor to
assess the risk of the case in question
very carefully because the aim is that
the percentage uplift should reflect the
risk of losing."
There were many pitfalls to be sorted
out on conditional fee agreements, said
Michael Napier. So far, the Lord
Chancellor had refused to make a regu-
lation providing for a cap on the
success fee, though this could be
particularly important in a case which
resulted in low damages and high costs,
because, in reality, while the
calculation of the conditional fee was
not based on a percentage of the
damages, the
payment
of the success
fee by the client would come out of his
or her damages. Unless this problem
could be overcome conditional fees
would be virtually unworkable.
However, a solution was on the horizon
because the Law Society of England
and Wales was close to concluding
terms on an "after the event" insurance
policy which, for a modest premium,
would protect the client against a
payment of costs if the case was lost
and would also include payment of the
plaintiff's own disbursements. "Such
insurance will be the key to unlock the
door to safe usage of conditional fees
for the client. Further protection is
provided by regulations which place a
high duty on the solicitor to explain the
agreement to the client. A cooling off
period has also been mooted to allow
the client to think it all over before
signing up." Michael Napier said there
had been an extensive debate on the
regulatory aspects of conditional fees.
"The prevailing view is that adequate
professional regulations already exist to
cover conditional fees. There will
also be extensive guidance to the
profession in explanatory booklets and
clients will receive an easy to
understand leaflet."
Hired Guns and Champions
In his address to the seminar on
ADR -
Paradise Regained?, Max Abrahamson,
Consultant, McCann FitzGerald,
commented that he was opposed to
contingency fees and that he preferred
to practise law rather than money
lending. In his view, the two justifica-
tions used for unrestrained contingency
fees were conflicting: i.e. that a high
percentage fee was necessary because
of the high risk and secondly, that such
fees did not promote disputes because
cases were only taken if they had a
good chance of success.
Alternative Dispute Resolution, said
Max Abrahamson, was sometimes
mistakenly seen as an attempt to regain
a lost paradise where disputes could be
decided equitably, but this was to
overlook the real practical (non lawyer-
made) complexities of disputes
nowadays. ADR thrived because of the
belief that ordinary resolution by the
courts was unsatisfactory and a view
that we had a "Rotweiller" system of
advocacy. Yet it was a mistake to see
alternative dispute resolution as a form
of compromise.
The solicitors' profession should
emphasise that it could resolve the
imbalance between these two views,
said Mr. Abrahamson. Solicitors must
persuade the public that they have -
and always have had - a dual role of
being champion and hired gun, i.e. that
they would fight as hard as possible to
settle and then go into win. There was
nothing inconsistent in this approach
and the public should be convinced of
it. Solicitors had always practised a
form of alternative dispute resolution,
for example, by engaging in a frank
exchange with a colleague in order to
settle a case. Clients must be
encouraged to trust their lawyers to
perform this role.
Dispute resolution was a very difficult
job of work, he said, and it was not
necessarily assisted by our current
system of advocacy or, indeed, any of
its trappings such as "fancy dress which
is designed to provoke awe".
A large number of ADR practitioners
were not lawyers, and it was essential
for the solicitors' profession to promote
its expertise and to switch the emphasis
towards the
investigation
of the issues
in dispute and away from
presentation.
It was necessary to integrate the role of
alternative dispute resolution and
litigation. Solicitors should do their
own advocacy, he stated; they were
well capable of it and should not
hold back.
•
Barbara
Cahalane
193