Contingency fee caps 'not high enough'

Less than a third of lawyers believe the MoJ’s contingency fee caps, which will come into force with the rest of the Jackson reforms on 1 April 2013, are high enough, according to a joint survey by Solicitors Journal and the Association of Costs Lawyers.

Almost half, 48 per cent, said the limits on fees of 25 per cent of damages for personal injury cases, 35per cent for employment cases and 50 per cent for all other cases, were not high enough. A total of 23 per cent said they were not sure.

However, a slender majority did think that contingency fees would replace conditional fees after April. Of the 201 respondents to the online poll, all but 20 of whom were solicitors, 70 thought they would replace conditional fees, 67 thought they would not and 64 were not sure.

A total of 39 per cent agreed that the ATE insurance industry would be ‘decimated’ by the Jackson reforms, with 48 per cent predicting that it would ‘not entirely’ be decimated.

Despite this, 44 per cent of respondents thought most solicitors would continue to offer conditional fees after April 2013.

Half as many thought a ‘large minority’ would, and a similar number that a ‘small minority’ would offer conditional fees.

In a separate development, David Marshall (pictured), managing partner of Anthony Gold described the draft contingency fee or Damages-Based Agreements regulations as a “dog’s dinner”.

He said the wording had not made it clear whether inter-partes costs were included in the amount subject to the cap or whether ATE premiums were included.

Marshall predicted that in personal injury actions, where QOCS was available, there might be little take-up of contingency fees.

The MoJ is expected to publish the draft civil procedure rules implementing the Jackson reforms tomorrow.