November 30 2023

Let’s stop talking about ‘no win, no fee’

Let’s stop talking about ‘no win, no fee’

Speeding ambulance, from Flickr, Creative Comms, morebyless

One of the best resources ombudsman schemes have at their disposal is cases. Used as dry academic statistics, they are of limited interest. But used for what they really are – personal stories of tragedy and cruel humour – they are a fantastic way of raising awareness. Pic is from Flickr under creative comms licence by morebyless

  • You can read Jane Gittins from Spencers Solicitors on what ‘no win, no fee’ means HERE

Of course there are ethical and legal issues: we never use people’s names without their consent and we cannot allow media coverage we get to descend into trial by television either of a lawyer or a customer. But there are always sensible and articulate customers one can deploy to illustrate the point that you are trying to make.

And that is, of course, the central motivation behind our media work. Yes we want to raise awareness of what we do and how we do it. But truth be told, the Legal Ombudsman is never going to be – and should never seek to be – the first name on everybody’s lips.

Most people only use a lawyer a handful of times in their lives and few of them have any real reason to consider complaining to us. No – the real motivation is prevention rather than cure, to explain to people how they can stop things going wrong rather than how to react when they do.

Which is why we have recently been talking about the dangers of ‘no win, no fee’ legal services. Not that we think they are intrinsically a bad idea: for all their faults (and there are many) they have successfully allowed many people who had previously been priced out of law to take action to defend their rights or obtain redress.

But the promise – that you will never have to pay unless you win and even then, the costs will be met by the other side – is simply wrong. As too many of the cases we have seen show, there are loopholes in the agreements which can saddle customers with thousands of pounds in unexpected costs.

The term ‘no win, no fee’ should be phased out and, in the meantime, caveat emptor: buyer beware.

Fortunately, we had a very articulate customer whose personal story perfectly illustrated the point – a man whose law firm had withdrawn halfway through his case on the basis that the claim was unwinnable and who, when he won having soldiered on alone, demanded some £24,000. And the coverage was very pleasing with pieces in most of the national papers and extensive coverage on TV and radio.

What slightly irked was that, because of one of those accidental collisions of timing, our press release went out on the same day as the criminal Bar had decided to mount their protest about legal aid reductions. Most papers covered both stories, some leading with us and others with the protest, but all kept the two issues separate as though there was no link between them.

On the contrary, although the symptoms are different, the underlying cause is very much the same. The legal world is undergoing a rapid and a painful period of change; moving from a profession steeped in tradition and funded by a combination of rich individuals and corporate entities on the one hand and public subsidy on the other to a largely private and corporate industry like any other. And while the cuts to legal aid are driven more by public spending issues than mere legal reform, their impact is likely to reinforce the process of change.

This is where the sort of problems we see every day arise. Few of the complaints we receive are about lawyers who are deliberately dishonest or inadequate. The mistakes we see come from the tension between law as a profession and law as a business, from people who are good at law but bad with money. Law firms who get into trouble with ‘no win, no fee’ are those who run into cash flow difficulties or consistently overestimate the winnability of the cases they take on. Faced with increasing financial risk, they take on more and more work or cut costs to the bone, giving progressively worse service as a result.

And most law firms are generalists rather than specialists. Received wisdom over the past few years has been to diversify sources of income between traditional individuals, legal aid, and via relationships with insurance companies, estate agents, and perhaps even claims management companies. But income in each of these sectors is being squeezed by the recession, by new IT-driven commoditised systems of provision, and by increasing competition in the market. Changes in any one income stream has an impact on the basic financial model by which many firms operate.

In the longer term, this transformation may well produce a more efficient, affordable legal profession. However, the process of change will not be easy. And it is for that reason, if for no other, that people like me, who see the problems as they arise, speak up about the price that consumers are paying.