Repeal damages based agreement regulations

7 April 2010

The President of the Law Society, Robert Heslett, has written to Dominic Grieve MP, Shadow Justice Secretary, calling upon him, if elected to Government, to repeal immediately the Damaged Based Agreement regulations, which came into force today and as a matter of urgency review the framework for contingency fee agreements in the round.

The Law Society fought very hard to prevent the regulations coming into force and will continue to lobby to have them overturned.

The regulations restrict the percentage of damages, that a solicitor can take as a fee, in employment cases, to 35%, including VAT. Writing to Dominic Grieve Heslett says he is "extremely concerned that the restriction in the level of damages for consumers with employment matters, that are complex or which are meritorious but uncertain of success, may well be unable to find solicitors able to take on their cases them because the solicitor cannot meet the financial risk of covering their costs."

The Law Society President, says: "This is a cavalier move by the Government which is not only damaging to the citizen but wrong in principle. Professor Moorhead, on whose research the Government relied, has written to Parliament to indicate that his research should not be taken as providing evidence to support this limitation. It is outrageous that Government should seek to twist his research in order to use it as a basis for these regulations. The regulations may well remove from citizens the choice of representation and force them to rely on services provided by trade unions. It is difficult to see anyone other than Trade Unions benefiting from these hasty changes. Experience in respect of equal pay deals, suggests that unions may not be in the best position to deliver appropriate results for their clients and those wishing to challenge such deals may well find it impossible to do so."

The Law Society fully accepts that, particularly in the unregulated sector, there are a number of concerns about the regulation of agreements between claims handlers and their clients. In respect of solicitors, these are fully addressed by the Professions Code of Conduct. The Society invites any future government to ask the Legal Services Board, as a matter of urgency, to look closely at the regulation of employment matters and, indeed, such agreements so that a fair arrangement for citizens can be reached. The Law Society would be happy to work alongside the next Government in such a review.