Both the government and Lord Justice Jackson claim that the main problem is that the current conditional fee arrangement system for personal injury claims leaves the client with limited interest in the amount their lawyers actually charge since claimants do not foot the bill. However by making injury solicitors‘ success fees the responsibility of the client instead of the losing defendant that will most obviously change.
The Ministry of Justice claims that competition will help to drive down lawyers’ success fees. However for the kinds of low-value claims that these proposals are mainly targeting, experts anticipate that success fees will swiftly drop to nil. This will allow injury solicitors to continue to tell prospective clients that they will still not have to pay a penny in legal fees.
Success fees are often interpreted as a way for lawyers to become unjustifiably enriched. However this runs against the original intentions of the 1999 Labour government which allowed fees to be recovered from the losing side of a claim. Labour essentially brokered a deal with the legal sector because it wanted to remove legal aid from personal injury claims cases. Injury lawyers would run all of their cases using conditional fee arrangements, and as the winners of such cases would recover the costs of litigation from the losing side, the risks of not being paid were minimised.
While the theory seemed sound, the system has since seen abuse from some injury lawyers that have made their living from CFAs. However industry experts have questioned whether the reforms will end up negatively affecting claimants in other kinds of cases.