Archive for the ‘Commercial Litigation, General’ Category

Government Signals Reform to No Win, No Fee

The Government has announced it is to reform the ‘no win, no fee’ system, which allows claimants to pursue legal disputes and only pay legal fees if they win the case. Under the English legal system, the ‘loser pays’ principle applies, which means that the loser of the case pays their fees plus those of the winner.

 
Lawyers taking cases on a no win no fee basis charge a ‘success fee’ which broadly varies with the risks atta Stafford Courtched to the outcome of the litigation, but which typically runs from 10 to 100 per cent. In a recent libel case, a claim valued at £5,000 was accompanied by a bill for legal costs from the claimant of nearly 10 times that amount.
 
It is the potential cost to the loser when success fees are involved that was highlighted on Radio 4 this morning by Justice Minister Ken Clarke as a principal reason for the need to reform the system, which was only introduced in 1999 and which has been subject to much tinkering since. For example, a new system for dealing with small-value motor accident claims, involving fixed scales of legal fees, was introduced only last year. The intention behind no-win, no fee, was to widen the access to justice for those least able to pay legal fees.
 
Citing a ‘cost explosion’, particularly as regards claims against the NHS, Clarke claimed that in many cases the legal fees involved were many times the value of the claim.