By Russell Wallman Director of Strategic Policy The Law Society

Fear of the unknown has meant that since their inception, CFAs have been bedevilled by excessive regulatory requirements. These were introduced primarily because of a wish to compromise with the most conservative elements of the legal professions who opposed conditional fees in principle The Law Society has supported Conditional Fee Agreements (CFAs) from the time the then Government first proposed them in 1989. We have put in a great deal of effort since they were introduced to make them work. But there have been many obstacles to their success and we still have some way to go before they provide the kind of access to justice promised. The Society initially favoured CFAs as a way of providing access to justice for those on middle incomes who were too well off for legal aid but not wealthy enough to afford the normal costs and risks of litigation. We now accept that given the limited funds available for legal aid, it is appropriate that CFAs be used in place of legal aid where appropriate - but only once they have been shown to work satisfactorily. And CFAs will never be appropriate for family or criminal cases which are not primarily about recovering money. Of course, it is not comfortable for lawyers to gamble with their own fees. If there were no other constraints or factors to consider, most lawyers would prefer to be paid whether they win or lose - who wouldn't? But conditional fees meet a real need for clients. Litigation is a stressful experience and inevitably involves risk. But who should bear the risk? Conventionally it has been borne entirely by the clients - it's their case, their risk - and their loss if the case fails. But there is a very good argument that it is reasonable for the lawyer to share the risk rather than the client bearing it all Lawyers undertake hundreds, if not thousands, of cases during their working lives. The typical client on the other hand will very rarely be involved in litigation - often no more than once in their lifetime. The loss that a lawyer takes with one case which doesn't succeed will be compensated by success fees in the majority that do. By contrast, this may be the one occasion when an individual client is involved in litigation. If he or she loses and has to pay extensive costs - on top of failure in their main objective in the litigation - it could mean financial ruin. So why shouldn't lawyer and client agree that the risk will be shared by the lawyer rather than falling entirely on the client. Nor can it be sensibly argued that CFAs are inherently less ethical or more open to abuse than cases based on standard charging. Critics have claimed that they will encourage unethical practice among lawyers anxious to win a case at any cost. There is no evidence that this has happened. There is at least an equal theoretical risk of cases being dragged out by solicitors and barristers charging hourly or daily fees. There is always some risk from the tiny minority of unscrupulous practitioners - but the risk is no more significant where cases are conducted on conditional fee arrangements. And we cannot sensibly deny clients a beneficial and ethical option simply because a tiny minority of lawyers might abuse it.

From the client's point of view, conditional fees have the considerable merit that they align the interests of client and solicitor much more closely than does the traditional hourly rate basis of payment. Lawyers only get paid if the client wins the case. Indeed, from that perspective there is much to be said for permitting contingency fees as well. . Russell Wallman Director of Strategic Policy The Law Society