Well, they've increased legal fees for a start, says Alan Hunter
Conditional fee arrangements (CFAs) have been around for four years now. As far as the government is concerned, they've certainly served their purpose.
But have they served their purpose? One can only assume the government's motive in reducing the legal aid budget was to reduce the burden on the Exchequer - and by extension on the taxpayer. As an insurance player, we see a different side of the story.
Local authorities, housing providers and health services are all recurring targets for no-win, no-fee litigation. But many of these claims come in considerably below the excess, and are thus self funded. CFAs have increased the legal costs associated with a compensation claim.
With local authorities forced to fund these increased legal costs, the reality is that the burden of funding access to justice has
simply been shifted from the legal aid budget to the budgets of individual public services.
Recent rulings clarifying the fees that can be charged and other elements of the CFAs regime have been welcome. Clearer parameters around after-the-event (ATE) insurance policies can only help. And local authority insurance departments won't be shedding too many tears over the high profile difficulties of some no-win, no-fee legal providers.
We are currently working with the Local Government Association to investigate
further the impact CFAs have had on local authorities, and the difficulties local councils are facing. This includes looking at how the costs of individual claims have risen, and how, in today's litigious society, the number of claims has escalated as well. The results, due in July, should be interesting.
CFAs are undoubtedly here to stay, but there are positive signs the courts are finally beginning to impose some sensible rulings that might help them to bed down better, and resolve the disputes between lawyers and the insurance industry. Regardless of these steps, those behind the legislation might like to take a look at the impact on front line public services and resources before CFAs are heralded a success.
Alan Hunter is claims manager at Zurich Municipal