Going to law is too often a sad fact of commercial life. It can give terrifying new meaning to the term 'extraordinary costs'. But now the Government is planning big changes that will bring new dangers as well as new opportunities for business. From April 1998, by remmoving legal aid from all cases involving money and financial damages, the Government is aiming to introduce the concept of 'no win, no fee' in most cases of civil litigation.
Essentially, such conditional fee deals mean that a plaintiff agrees a contract whereby he does not pay the lawyer a penny unless he wins his case. If successful, the lawyer's fee - if agreed - is then paid, together with an 'uplift' or 'success fee' of anything up to 100%. The one caveat is that their mark-up should not exceed 25% of the damages won.
Conditional fees have already been tried with some success. When introduced in 1995, conditional-fee arrangements were restricted to personal injury work and to certain insolvency and human rights cases. They have been used in more than 30,000 personal injury cases, often against drivers, employers and local authorities, where insurers pick up the tab.