The government has announced its plans to regulate the ‘no-win, no-fee’ payments to solicitors. Charles Price examines this further and advises on a certain kind of company insurance that offers free legal advice.
This month a paper was produced which may inhibit those seeking to pay lawyers on a no-win, no-fee basis. Some would bemoan another avenue of cheap legal advice and representation cut off but in fact, another cheap source of law is available to businesses.
Contingency fee agreements have hitherto been unregulated but a consultation on the proposed amendments to the Coroners and Justice Bill seeks views on the details of the regulatory requirements, including:
- 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.
Paying lawyers on a ‘no-win, no-fee’ basis obviously has its advantages in that if you lose, you don’t pay a penny to your solicitor, but there are disadvantages. You may have to search far and wide for a solicitor who will adopt your case on that basis. Many solicitors know that there is an element of unpredictability at a tribunal, in that you cannot always legislate for a witness departing from a carefully drafted witness statement. Perhaps you may be lucky enough to find a solicitor ready to hedge his bets on your case, but one who will only proceed on the basis of ‘no-win, no-fee’ for a hugely disproportionate portion of the fee.
Insurance cover
There is, however, another source of cheap legal advice and it is right under the nose of most employers. Most businesses will have insurance of one sort or another and usually piggy backing those, will be an ‘add on’ in the form of employment law advice and representation. This type of employment law insurance is only available as a ‘free’ extra service because not many people are aware of it and thus call on it.
Sometimes, this type of insurance will not only come with a legal helpline but also free representation and even compensation cover. You must tread carefully, however, when utilising this cover. It is usually a condition of cover that you must have referred to the insurer as soon as the employment law issue arose. It is no good having made a pig’s ear of the early phases of a redundancy programme, only to ask your insurance company to bail you out once things are on an inexorable path towards a tribunal.
The most important thing to do when speaking to your helpline advisor, is to take a note of every word of advice given to you. I have acted as a mediator between an employer seeking advice and an insurance company advisor. Unfortunately, the advice I was given changed from week to week and as a consequence, I was told that we hadn’t followed early advice given and therefore our cover would be stopped. I was able to retrieve the situation by asking to speak to a line manager equipped with my early advice notes in hand.
Solicitors, in any event, will often give a free first consultation if you approach them with an employment law question. All solicitors have a duty to send you a list of their fees charged before any work is commenced. If you think you have been over charged, negotiation with the fee earner will usually result in a reduction. In extreme cases you can complain to the SRA if you think you have been over charged but continual monitoring is the common sense approach.
If you wish to attempt to avoid solicitor costs, new companies are setting up like PublicBarrister.com which has taken advantage of new law, and means that a barrister’s advice may be sought ‘without the hassle and expense of going through a solicitor’. Additionally, some barristers have taken the vaunted Public Access exams, which allow the public to go straight to them.
Charles Price is a barrister at no5 Chambers.
To join his employment law discussion group on HRzone.co.uk, please click here.
