Conditional Fee Agreements Order 2000 (Hansard, 2 March 2000)

§ Lord Bach
My Lords, I beg to move the fourth Motion standing in my name on the Order Paper.
This instrument, together with negative procedure regulations that are shortly to be laid before the House and rules of court will give effect to Parliament's intention to increase access to justice through making it easier and more affordable to use conditional fee agreements.
Many tens of thousands of people have already benefited from being able to take claims using conditional fee agreements. Many more people will benefit once provisions of the Access to Justice Act 1999 are implemented in April this year. These provisions will allow success fees payable under conditional fee agreements and insurance premiums against the risk of legal costs to be recovered from a losing opponent, rather than from the claimant's own compensation for the wrong or loss that has been suffered.
Section 27 of the Access to Justice Act 1999 substituted the existing Section 58 of the Courts and Legal Services Act 1990 with two new sections. The new Section 58 set out the conditions that were to be satisfied to create an enforceable conditional fee agreement. Read together with the new Section 58A it provides that all proceedings may be the subject of an enforceable conditional fee agreement, except specified family proceedings and criminal proceedings other than those under Section 82 of the Environmental Protection Act 1990. Under the new Section 58(4) the Lord Chancellor may specify the proceedings for which a conditional fee agreement can provide for a success fee. Article 3 of this order provides that success fees may be agreed for any civil proceedings.
So conditional fees will be available in all civil cases. The new provisions for recovery will make their use attractive in cases not involving money. Claimants in these cases cannot rely currently on the prospect of recovering damages to meet the success fee and any insurance premium against the risk of costs. From 1st April it will be easier for them to use conditional fee agreements. Defendants will benefit similarly by being able to use conditional fees. If they are successful, their success fee will be recoverable from the claimant.
The new Section 58A(1) allows the use of conditional fee agreements in proceedings under-Section 82 of the Environmental Protection Act 1990. Section 82 allows people aggrieved by a statutory nuisance to seek an order for that nuisance to be put right. These cases concern, for example, the failure of a landlord to maintain rented housing in a habitable condition. In the light of representations from housing support groups, the Government have decided that 755 conditional fee agreements can be made in these cases, but a success fee will not be available. Article 3 of the order therefore makes this exception.
Under the new Section 58(4) the Lord Chancellor also sets the maximum success fee applicable to conditional fee agreements. In consultation last autumn he took the opportunity to ask whether the current limit of 100 per cent for the success fee continued to be appropriate. Opinion among respondents was mixed. Some, including insurers and some solicitors firms, felt that no maximum was needed as assessment by the courts would weed out success fees set at an unreasonable level. Others believed, particularly in respect of personal injury cases, that the 100 per cent limit should be retained to protect unworldly clients.
The Law Society and the Bar believed that for proceedings which might be heard in the Commercial Court and the technology and construction courts a limit of 100 per cent was neither needed nor desirable. The same would also be true, it was argued, of some shipping cases in the Admiralty Court. Clients in proceedings heard in these courts tended to be sophisticated users of litigation services who did not need the protection afforded by the 100 per cent limit.
The Lord Chancellor has, for the time being, decided that the maximum success fee should continue to be 100 per cent for all claims. Article 4 of the order retains this maximum for all agreements where there are success fees. The Lord Chancellor wishes to see how the new scheme for conditional fee agreements is developing before deciding on whether to make any 756 changes. He wishes to expand the role of his department as sponsor of the legal sector, especially in the international sphere and will keep under continuous review what is best in partnership with the providers and users of legal services. In the meantime a higher limit will not be set.
Article 2 of the order revokes the Conditional Fee Agreements Order 1998.
This instrument is central to the new scheme for conditional fees. I commend it to the House.

§ Lord Goodhart
My Lords, the principle behind this matter was extensively debated when we were considering the Access to Justice Bill. There is no point in considering that principle again today.
So far as concerns the success fee, I strongly take the view that it was appropriate to have a ceiling on it. It seems to me, for example, that when one is involved in commercial cases or shipping cases, one almost inevitably has clients who do not need to rely on conditional fee agreements in order to litigate. It would be very unfortunate if the use of conditional fee agreements was extended to cover those cases. I believe that a success fee limit should be retained.

§ Lord Kingsland
My Lords, I have nothing whatever to add to what the noble Lord has said.