UK Government Consultation proposes to slash Conditional Fee Agreement Success Fees by 90%

Hot on the heels of Jackson’s LJ's "Review on Civil Litigation Costs", which was published last week, the Ministry of Justice released a further consultation paper relating to the costs of Defamation proceedings yesterday. Entitled "Controlling costs in defamation proceedings - Reducing Conditional Fee Agreement Success Fees",  this Consultation Paper addressed the specific issue of Conditional Fee Arrangements (CFAs).

Lawyers Niri Shanmuganathan

The consultation proposes to reduce the maximum 'success fee' which may be recovered in defamation proceedings funded under CFAs from 100% to 10% of base costs.

The proposal is described by Jack Straw as an "interim measure" for dealing with disproportionate costs while the Government considers Jackson LJ's wider proposals, which seek to radically change the existing arrangements for all cases where CFAs are used.

The Government undoubtedly now sees CFAs as an urgent and pressing issue, indeed Jack Straw in his foreword to the Consultation notes "immediate steps are needed in respect of defamation proceedings, even if they will only serve as an interim solution". This urgency is reflected in the relatively short period for submissions, which have to be sent by 16 February 2010. It is further indicated that "the change could be introduced relatively quickly through secondary legislation, albeit with full Parliamentary scrutiny".

This proposal must be adopted as soon as possible as a first step to bring to an end the wholly disproportionate level of costs that are being sought to be recovered against defendants under the current regime.

Please click here for the Ministry of Justice press release and Consultation paper