The Civil Justice Council (CJC) published a research paper in November 2008 on contingency fees which includes a study of the contingency fee system used in the US. The research was undertaken partly due to the finding of the CJC in its report published in June 2007 on “The Future Funding of Litigation – Alternative Funding Structures" that “in multi party cases where no other form of funding is available, regulated contingency fees should be permitted to provide access to justice”. It was also prompted by the views of some people that there are difficulties with the after-the-event insurance market and also due to concerns expressed by the Master of the Rolls at the government's reluctance to look into contingency fees and his view that there was a real need for an independent study in order to understand what benefits they may bring to improving access to justice. The research was co-authored by Senior Costs Judge Peter Hurst.
The paper looks at alternatives to the current system of conditional fee agreements (CFAs) and in particular at damages-based contingency fees. Under the latter system, a lawyer is paid nothing if the case is lost, and a percentage of any damages recovered if the claimant wins. The paper concludes that should CFAs fail “contingency fees, either with or without costs shifting could operate effectively" in England and Wales and may improve access to justice for multi-party and higher value cases, although it may worsen for lower value cases. The paper can be viewed on the CJC website at www.civiljusticecouncil.gov.uk/files/cjc-contingency-fees-report-11-11-08.pdf. No doubt this issue will be considered again during the course of Lord Justice Jackson's costs review next year.