No win no fee makes it hard to settle disputes,says judge

Personal injury solicitors who operate under a conditional fee arrangement such as ‘no win no fee‘ may make it more difficult to settle disputes, according to one appeal court judge.

Lord Justice Rix expressed his concerns on the legal practice recently in the wake of a legal dispute involving liability for a school dining room flood where legal costs rose to more than £200,000.  However, the judge felt that because of the involvement of no win no fee solicitors, settling the dispute was a nearly impossible task.

The Court of Appeal had been requested to rule on which party would be responsible for paying the legal costs of the case in the aftermath of a previous trial in which Epsom College was awarded in excess of £27,000 in damages from a construction firm following the 2006 flooding incident.  However, the appeal case had been one effectively waged between two insurance firms, said Lord Justice Rix.

The judge said that solicitors for the school’s insurers had set up a no win no fee agreement in the wake of the flood, and that Bisley Construction, which now trades as Pierse Contracting Southern, was to blame for the flood, as the construction company had undertaken work in the hall three years prior to the flood and that one of its employees had hit a water pipe with a nail.

The construction company disputed these claims, and while the compensation awarded to the school in the initial legal proceeding had been less than £30,000, the construction firm’s legal costs had rocketed to more than twice that at £60,000.  Even more shocking was that the legal costs for the school had risen to an eye-watering £165,000.

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