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Lord Chancellor's Department
Press Notice
30 March 2000

 

THE ACCESS TO JUSTICE ACT 1999
PROVISIONS COMING INTO EFFECT ON 1 APRIL 2000

Under the Access to Justice Act 1999, new provisions governing the Legal Services Commission, Rights of Audience and Conditional Fee Agreements come into effect on, or shortly after, 1 April 2000.

CONDITIONAL FEE AGREEMENTS, INSURANCE POLICIES AND MEMBERSHIP
ORGANISATIONS

The following come into effect on 1 April 2000:

- The Conditional Fee Agreements Order 2000 (2000/823);
- The Conditional Fee Agreements Regulations 2000 (2000/692); and
- The Access to Justice (Membership Organisations) Regulations 2000 (2000/693).

Framework for Conditional Fee Agreements: Section 27

1 April 2000: This Section substitutes the existing section 58 of the Courts and Legal Services Act 1990 with two new sections. The new sections provide the framework for conditional fee agreements.

New Section 58 redefines conditional fee agreements to include agreements which provide that legal fees are payable only in certain circumstances, provided that the agreements comply with requirements set out in regulations. This section also sets out the conditions that are to be satisfied to create an enforceable conditional fee agreement. Read together with the new section 58A it provides that all civil proceedings, and criminal proceedings under section 82 of the Environmental Protection Act 1990, may be the subject of an enforceable conditional fee agreement. Other criminal proceedings and family proceedings remain outside the ambit of these provisions. The section allows for a distinction to be drawn between agreements that provide for a success fee and those which do not. Section 58A(6) allows success fees to be recovered from the losing party in a case.

Conditional Fee Agreements Order 2000

The Order is made under section 58(4) of the Courts and Legal Services Act 1990 and specifies the proceedings to which a conditional fee agreement must relate if it is to provide for a success fee. These are all civil proceedings bar specified family proceedings. The order also sets the maximum success fee applicable to conditional fee agreements. This will remain at 100%. CFAs are also permissible for 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 has decided that conditional fee agreements can be made in these cases, but a success fee will not be available. The order provides this exemption.

The Conditional Fee Agreements Regulations 2000

The Regulation is made under sections 58 and 119 of the Courts and Legal Services Act 1990. The regulations set out the detailed requirements with which an agreement must comply if it is to be enforceable.

As well as setting out what information a CFA must contain, the regulations include provisions to improve client care by legal representatives. A legal representative will have to cover in preliminary discussions whether the client is already covered for the costs of taking a claim by the terms of a pre-existing insurance policy or by membership of a scheme run by an organisation of which he is a member, such as a trade union. The legal representative will also have to discuss with the client the most appropriate means of funding his claim, and also any financial liabilities he may face in entering a conditional fee agreement. For the benefit of the client who is a claimant the regulations require a conditional fee agreement to include a term that a solicitor may not recover from a client any part of the success fee disallowed by the court.

- Section 29 allows the court to include in any costs order, any premium paid for an insurance policy against the risk of incurring a liability in those proceedings. The recovery of the insurance premium is not limited to policies backing conditional fee agreements, but covers all after the event policies. The way in which recovery will operate is subject to rules of court.

- Section 30 applies where bodies such as Trade Unions fund litigation (including adverse costs orders) on behalf of their members from their own resources and do not take out insurance against potential liabilities. The section allows a membership organisation (to recover as part of a costs order) a sum that reflects the provision the organisation has made against the risk of having to meet the liabilities of the member whose case it has underwritten. That sum shall be no more than one determined in a prescribed manner and can only be recovered by a prescribed body that satisfies prescribed conditions. That prescription is to be provided in Regulations.

The Access to Justice (Membership Organisations) Regulations 2000.

The Regulations provide that prescription. It specifies the bodies (as ones approved by the Lord Chancellor); the conditions the arrangements must satisfy and the way in which the sum is to be determined.

The Benefits of CFAs

Conditional fee agreements redress the fundamental problem of the British legal system, which is that is open to very few people unless they are legally aided. The majority of people have been unable to litigate as they cannot afford to pay lawyer's fees if they lose. They have been excluded in practice from access to justice.

The Regulations and Order, together with Rules of Court currently being drafted, will give effect to Parliament's intention to increase access to justice through making it easier and more affordable to use conditional fee agreements and insurance policies. The Regulations govern the content of CFAs and client care. The Rules of court will include detailed rules on the assessment and recovery of success fees and insurance premiums.

Once provisions of the Access to Justice Act 1999 come into force on 1 April, successful litigants will be able to recover success fees and insurance premiums from their unsuccessful opponents rather than from their own pockets. This will make conditional fee agreements and after the event insurance of all kinds attractive to many more people who want to enforce their rights, including defendants and those making non-money claims. The new provisions relating to membership organisations will enable trade unions, staff associations and some clubs to provide enhanced legal services to members and their families.

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