The Court of Appeal has ruled that solicitors who help their clients by funding the cost of disbursements should not be liable for costs if a case fails.
The Law Society's intervention in the case of Germany v Flatman has established that solicitors who help clients by funding the cost of disbursements, such as medical reports in a personal injury claim, should not be liable for costs if a case fails. The Court of Appeal specifically endorsed the arguments put forward by the Law Society to this effect.
The case dealt with the situation where clients receive legal representation from a solicitor on a no-win, no-fee basis and the solicitor also agrees to cover the costs of the client's disbursements if the case is lost. If the solicitor did not agree to cover the costs, clients might well be unable to begin the action and so lose even the opportunity to obtain compensation.
The original ruling in the High Court threatened such arrangements and the Society believed that it was right to intervene to ensure that the Court of Appeal was aware of the likely effect of the judgment. The Court of Appeal endorsed the Society's arguments.
The timing of the ruling comes as government reforms to civil litigation costs and funding are reducing access to justice for thousands. The Law Society has very serious concerns about the potential impact of the government's rushed implementation of its civil justice reforms.
Law Society president Lucy Scott-Moncrieff said:
'The vast majority of the population cannot get legal aid to bring these types of claims, so conditional fee arrangements are one of the few ways that ordinary citizens, who fall victim to serious errors, can seek justice before the courts.
'These type of fee arrangements assist access to justice for litigants who cannot afford to bring the litigation themselves, often in the field of housing law, personal injury and trade union cases and are particularly important in a climate where so many cuts have been made to public funding.
'Measures like this have been adopted by solicitors to facilitate access to justice and they would be acting under such circumstances only where they viewed the claim as being likely to succeed.'
Whilst only having intervener status in the proceedings, the Law Society, represented in court by David Holland QC played an instrumental role in this case.
Lucy Scott-Moncrieff added:
'The significance of the case is that it enables solicitors to address problems that their clients face in funding meritorious claims.'
Ends
Notes to editors
The Law Society applied in May 2012 to intervene in these proceedings and this was granted and is being represented by David Holland QC.
The Court of Appeal panel comprised Lord Justice Mummery, Lord Justice Richards and Lord Justice Leveson.
The Law Society is the independent professional body, established for solicitors in 1825, that works globally to support and represent its members, promoting the highest professional standards and the rule of law.
Contact: Catherine Reed, The Law Society, +44 (0)20 7320 5902