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Contingency fees – 2

Litigation Letter

Contingency fees – 2

A study of contingency fees in tribunals, also co-authored by Professor Richard Moorhead, was reported by Neil Rose in the Law Society Gazette of 4 December. It found that the use of contingency fees in employment tribunals throws up few major concerns and marginally improves access to justice, but needs better regulation to protect clients over issues such as transparency of charging. Lower-value or more risky cases are less likely to be brought under a contingency system, which highlights the need to find other ways to resolve low-value disputes. Professor Moorhead said he had conducted the study because of growing talk about ‘how terrible and American-like the system was becoming’. He concluded: ‘There is nothing particularly to worry about, which is quite an important message for people who bang on about how bad contingency fees are.’ He said the results would read across to general litigation ‘fairly well’ if costs-shifting was largely removed as it was in tribunals. There was no evidence that contingency fees lead to an increase in spurious or weak tribunal claims, or that percentage fees charged are generally excessive.

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