NO WIN – NO FEE AND THE OMBUDSMAN: TIME TO GO
Civil Legal aid is abolished, Employment Tribunal claims are down 79% due to fees, recoverable costs in personal injury are slashed, court fees are about to treble in some cases, Judicial Review is to be heavily curtailed, criminal lawyers are on strike, the Court of Appeal rules that the efficiency of the State comes before Justice and very many senior and respected commentators feel that we risk losing all that has been achieved in the 800 years since Magna Charta.
So the Legal Service Ombudsman may have felt that there are matters of rather more pressing concern than the nomenclature of no win no fee. However he has prepared yet another of his reports http://www.legalombudsman.org.uk/downloads/documents/publications/Complaints-in-focus-cfa-report-final-140103.pdf which even under the Mitchell criteria would probably qualify as trivial. I have hesitated before even bothering to write about it, but he is the Legal Services Ombudsman and the report shows such ignorance that I will spare it a few words.
The Legal Services Ombudsman is a senior civil servant. Consequently he should refrain from highly political, controversial statements which many of us believe to be untrue insurance company inspired propaganda, eg in relation to the Jackson Reforms.
“aim of these changes is to make legal services more accessible while managing costs” (That is a verbatim quote!)
“The “no win, no fee” model has played its part in fostering a culture of “ambulance chasing” and fraudulent claims, which has inadvertently driven up insurance premiums”.
“moves to rein in the burgeoning personal injury market”.
“The “no win, no fee” market has become increasingly aggressive”.
That is right-wing rhetoric, as well as simply untrue. Imagine the Ombudsman saying:
The “no win , no fee” model has allowed millions of our citizens to have access to justice which would otherwise have been denied to them by this Government’s savage attack on the ability of ordinary people to go to law.
“They have also cut fraudulent claims as lawyers will be very careful about taking on a losing claim, as they do not get paid. Under the old system the lawyer gets paid win or lose and so had no interest in the merits of the claim, fraudulent or otherwise.
“We must protect no win no fee at all costs. It is the only thing keeping the civil litigation system alive. We must encourage all injured people to seek justice”.
Can’t quite see him coming out with that can you, even though it is obviously true!
Transfer of risk
The Ombudsman complains that there “is a structural weakness in the nature of the agreements which allows some lawyers to pass the risk of unrecovered costs on to the consumer”.
It is not a structural weakness; it is part of the design and what is wrong with it? What in fact is happening is that the lawyer may be agreeing to charge no fee in the event of defeat, but to charge disbursements.
That is still a massive benefit to the client as compared with hourly rate win or lose funding. There is no “transfer of risk” except from the client to the lawyer. All it means is that we are taking only 95% of the risk as compared with 100%.
The hourly rate win or lose brigade are taking 0% of the client’s risk.
In any event this has only occurred because Parliament has abolished recoverability of after-the-event insurance premiums; such insurance of course covered own disbursements and paid its own premium thus ensuring that for a no win no fee client it was just that.
How about this for a totally inaccurate statement of the law; upon which much of the Ombudman’s report is based:
“if the cases loses, they [no win no fee lawyers] are left responsible for the other side’s costs as well as their own”.
No we are not! Wrong. End of. Two Court of Appeal decisions are relevant.
the Court of Appeal held that solicitors who help their clients by funding the cost of disbursements should not be liable for costs if the case fails even if no After-the-Event insurance is in place.
Of course the assumed starting point was that we were not allowed to fund such disbursements without risking a costs order; that is why many claimant lawyers felt they had to charge clients disbursements even in the event of defeat, the practise that the Ombudsman so deplores.
The Law Society intervened successfully, on behalf of solicitors, to allow us to pay our clients’ disbursements. Yes, Mr Ombudsman, as a profession we went to court to get an order that we could pay our clients’ disbursements. Can’t quite see that in your report. Must have missed it. Please tell us where it is.
the Court of Appeal dismissed an attempt by the employers’ insurers to obtain an order for costs against solicitors who had been acting for the employee until they withdrew from the case. The claimant had not had after-the-event insurance. In a passage quoted with approval by the Court of Appeal the Judge at first instance had said:
“As to the suggestion [the solicitors] stood to gain a substantial financial benefit from the case (both in terms of profit costs and a success fee), this is undoubtedly true in the sense that any solicitor engaged on a CFA has an interest in the outcome of the case. If the submission [is] that this of itself will render a solicitor liable to a [wasted costs order] or [non party costs order], it is simply contrary to the public policy that parties, and in particular, impecunious parties, should have access to justice when they do not have the means to fund litigation themselves. There must be additional factors before an order can be appropriate”.
The Court of Appeal went on to say, at Paragraph 37:
“A solicitor is entitled to act on a CFA for an impecunious client who they know or suspect will not be able to pay own (or other side’s costs) if unsuccessful.”
The Ombudman’s Report is illustrated by case studies. Case studies are anecdotal; they are generally used when you do not have the evidence to back up your case. If you have the evidence to back up your case then you use that evidence.
So here are a few conclusions from some of my case studies:
EVERYONE IS INNOCENT!
Six case studies below show that all the defendants in these cases were found Not Guilty.
EVERYONE IS GUILTY!
Six case studies below show that all the defendants in these cases were found Guilty.
Like the current Lord Chancellor, the Legal Service Ombudsman is not a lawyer. It shows.
The post of Legal Service Ombudsman achieves nothing. It is time it was scrapped.