Can lawyers agree over contingency fees?
Contingency fees, which are widely used in employment tribunals but banned in other areas of law such as personal injury, have come to the fore recently as various bodies have submitted their responses to the Ministry of Justice’s consultation on the issue, launched in July. The bar, for example, has just called for a halt to reforms to give more time for discussion and debate. But for some organisations, responding to the proposals has been somewhat trickier than others. Take the Employment Lawyers Association, for example. Its membership is split down the middle over the issue of contingency fees. While they can all agree that they want better, clearer regulation so that everyone knows what to expect, that’s where the consensus ends. Trade unions want to see tighter regulation of the controversial ‘settlement clauses’ which govern what happens when a case settles. They argue that the clauses pose a conflict of interest between an adviser’s desire to settle the case and safely trouser their cut of the damages, and what might be a claimant’s wish to take a case all the way to court in the hope of receiving maximum compensation, as well as (perhaps) a chance to see their former employer squirm in the courtroom. While that conflict might be hard to deny, many employment lawyers still see settlement clauses an essential way for them to limit their own risk. They would claim that the contingency fee arrangement would be far less attractive without them. The MoJ’s consultation on this extremely sticky subject closed on 25 September. But contingency fees are, of course, also currently being scrutinised by Lord Justice Jackson as part of his review of civil costs, commissioned by none other than the MoJ. Will the Ministry wait for the outcome of the report it commissioned before it presses ahead with its reforms? The timing of the consultation seems a tad daft. Perhaps that’s one thing all employment lawyers can agree on.