NEWS IN BRIEF

The Ministry of Justice has published its proposals for protecting claimants from unfair “no-win, no-fee” arrangements.

These include new powers for the Lord Chancellor in the Coroners and Justice Bill which, it says, will ensure claimants are made aware at the outset how much their claim is likely to cost.

The MoJ has also published a consultation document – “Regulating Damages Based Agreements” - setting out the details of the proposals.

Damages-based contingency fee agreements (often used to fund claimants in employment tribunal proceedings) have existed without specific statutory regulation until now, making often low paid, vulnerable workers claimants at risk of being locked into arrangements with no win, no fee lawyers when they could have free and high quality representation through their trade union.

A new clause in the Coroners and Justice Bill, which has been tabled in the House of Lords, gives the Lord Chancellor the power to regulate the use of these agreements and to extend or restrict their use in future. The consultation seeks views on the different options for regulation.

The proposals include:

• a cap on the percentage of damages that can be recovered by the representative
• a requirement that representatives provide claimants with clear and transparent information on total costs
• a requirement that representatives clarify the deductions made from the claimant’s award which are to go to the representative as their fee for taking the case
• a requirement that they provide explicit information on alternative methods of funding.

It is important the regulations include this sort of detail as simply regulating the charging element of contingency fee arrangements would not protect claimants.

The consultation runs until 25 September 2009. For more details and to download a copy go to: www.justice.gov.uk.