New Regulation of Conditional Fee Agreements - DCA publishes the summary of the responses to Consultation Paper!

The DCA published the summary of responses to the Consultation Paper 'Making Simple CFAs a reality' on 10/08/2005. The summary can be found at the website of the DCA: www.dca.gov.uk.
It appears that extensive changes within the conditional fee regime are imminent. The present regime was found overly complex by all respondents to the Consultation Paper. It also led to numerous technical challenges (for instance: Sharratt v London Central Bus Company Limited and other appeals (the accident Grooup Test Cases), Hollins v Russell and other appeals [2003] ECWA Civ 718). Although some doubts were voiced by the respondents regarding the scope of the changes, one ought to see the transformation of the regime proposed by the DCA as the step in the right direction (towards simplicity and away from technical challenges and confusion). Let us analyse what changes were outlined in the summary:

1. The Conditional Fee Agreement and Collective Conditional Fee Agreement Regulations, now in force, were declared "not necessary or effective". These will be revoked from 1 November 2005 (they will not be applicable to all agreements concluded on or after 1 November 2005).

2. The conditional fee and collective conditional fee agreements shall be governed by a number of legislative mechanisms (some already in force, others to be introduced or amended):
i. Section 27 of Access to Justice Act 1999 - to provide regulatory requirements for CFAs (the Act to be found at http://www.opsi.gov.uk/acts/acts1999/19990022.htm).
ii. Law Society's professional rules to regulate solicitor-client matters (to be developed).
iii. Civil Procedure Rules to regulate costs issues between the parties.

3. The Law Society, APIL and FOIL are to develop model agreements and supporting guidance in line with the new regime.

The tendency is to simplify and deregulate CFAs, to render the lawyer - client matters the responsibility of the Law Society and its members. One can observe the will to further privatise the CFA system - instead of extenstive regulation, the market forces are to ultimately help determine the quality of the agreements and the protection for clients.

The doubts of the respondents concerned, among others, the ability of the Law Society to effectively control the conduct of solicitors in these matters, or the remaining complexity of Section 58.