No Win, No Fee Solicitor

littlemac1980

Cody Pomeray wrote: »

Nevertheless, in the absence of any authorities, the route the courts would take here is unpredictable.

The right to earn a living is contingent on the common good. I cannot go and land 300 Yanks on Sceilig Mhichíl every morning, as per Casey v. the Minister for Arts etc. because there is a greater public policy interest trumping my right to earn a living.

So what is the public policy interest in restricting NFNF arrangements? If NFNF were challenged 60 or 40 or 20 years ago, I have little doubt but that the arrangement would have been confirmed as champerty, in keeping with the rest of the common law world.

So I suggest you have a strong point on the constitutional right to a livelihood, but I would not be confident that the NFNF arrangement, even in its most carefully worded form, would be given the blessing of the Irish courts in the absence of any statutory backing for NFNF which, I think, is badly needed.

I'd have to disagree.

I think our Constitutional Right of Access to the Courts would protect a clear and precise agreement to waive a professional fee in advance of embarking on Litigation which is always somewhat unpredictable. I believe the degree of weight we give that right is what differentiates this Jurisdication from the others.

I believe a strict NFNF agreement (provided properly advised on and only in respect of a solicitors own professional fee) is not Champerty, unlike for instance charging a percentage fee in Contentious matters - which incidentally is specifically prohibited in Statute (s68 Solicitors (Amendment) Act 1994). I think if there was an perceived doubt in the minds of the Legislature vis-a-vis the legality of NFNF arrangements it could have, and would have been dealt with in that legislation.

Cody Pomeray

littlemac1980 wrote: »

I think our Constitutional Right of Access to the Courts would protect a clear and precise agreement to waive a professional fee in advance of embarking on Litigation which is always somewhat unpredictable.

Why do you believe this?

I don't know of any authorities on the constitutional right to earn a living whereby a public policy issue turned on whether there was some precise and unambiguous agreement between private parties. That, to me, seems grossly unlikely.

It's like saying I can build an airport beside the hill of Tara so long as I have a precise and clear agreement with local landowners. No minister can stop me. No.

There is a strong argument to be made in citing Article 40.3, but it doesn't turn on whether the agreement is precise or clear. That would make no sense, in the context of this discussion.

littlemac1980

Cody Pomeray wrote: »

Why do you believe this?

I don't know of any authorities on the constitutional right to earn a living whereby a public policy issue turned on whether there was some precise and unambiguous agreement between private parties. That, to me, seems grossly unlikely.

It's like saying I can build an airport beside the hill of Tara so long as I have a precise and clear agreement with local landowners. No minister can stop me. No.

There is a strong argument to be made in citing Article 40.3, but it doesn't turn on whether the agreement is precise or clear. That would make no sense, in the context of this discussion.

Haha - I didn't mean every clear and precise agreeement - that would be mad!

I meant such a clear and precise agreement - being the agreement to waive the fee, i.e. provided it was clear and precise in relation to only applying to the professional fee (and also requiring clear and precise advice regarding the other parties costs etc. as per my earlier post).

Cody Pomeray

But you still say that a public policy issue, which is what champerty is, can be negated by a precise agreement between private contracting parties?

That can't be.

littlemac1980

littlemac1980 wrote: »

...a clear and precise agreement to waive a professional fee in advance

not

"a clear and precise agreement"

littlemac1980

Cody Pomeray wrote: »

But you still say that a public policy issue, which is what champerty is, can be negated by a precise agreement between private contracting parties?

That can't be.

No - not at all - what I said is that the difference is that in determining whether or not the agreement is contrary to law the Court would have regard to public policy, and therefore the need to ensure the Right to Access to the Courts and so that is a relevant factor in this Jurisdiction.

It has nothing to do with the fact that the agreement needs to be clear and precise (as do all agreements generally), though in the context of this discussion obviously given the subject matter of the agreement - it would need to be ensured that there is a high degree of clarity both in the terms of the agreement itself and in the advice given in conjunction with it - as per the Law Society Guidance Note.

hullaballoo

Cody, please stop deliberately misunderstanding champerty. There have been plenty of posts in this thread defining champerty and maintenance, accompanied by case law backing up that definition.

NFNF arrangements can cross over into the realms of champerty and maintenance and that may be an issue but you know full-well that NFNF does not necessarily equate to champerty and maintenance.

Cody Pomeray

hullaballoo wrote: »

Cody, please stop deliberately misunderstanding champerty. There have been plenty of posts in this thread defining champerty and maintenance, accompanied by case law backing up that definition.

Please read the case law to which I have referred.

Acros the common law world, there is a consistent theme of NFNF coming under champerty. It seems to me that this common law position is only ever overcome by way of statutory reform, ie the 1990 regulations in the UK whose name escapes me.

NFNF has never been challenged before the irish courts with regard to champerty, and barring any constitutional impediment as johnnyskeleton raised, there is no apparent basis for believing we differ to the rest of the common law world in our laws on NFNF.

hullaballoo

You're comparing apples with chalk there. NWNF operates on a wholly different basis in other jurisdictions. Lawyers will actually fund litigation in England, including their own out-of-pocket expenses etc. in order to get people in the door and generate case-loads.

In Ireland, NFNF generally works in that the solicitor agrees only to waive his/her own professional fee. The client remains liable for all out-of-pocket expenses (e.g., expert reports/inspections etc.) as well as any award for costs made against them in court. That's the difference. There is no funding of litigation if it is done correctly. It's just a fee waiver based on a contingency.

spyderski

hullaballoo wrote: »

Is that why we have to wear the ugly gowns?

As far as I know, you don't *have* to.....

Cody Pomeray

hullaballoo wrote: »

You're comparing apples with chalk there. NWNF operates on a wholly different basis in other jurisdictions. Lawyers will actually fund litigation in England, including their own out-of-pocket expenses etc. in order to get people in the door and generate case-loads.

You are confusing the issue for yourself. If you will not read the case law I mention, I will post it here instead.

Dictum of Lord Denning in Trendtex Trading Corporation and another v Créit Suisse - [1980] 3 All ER 721

Champerty is a species of maintenance; but it is a particularly obnoxious form of it. It exists when the maintainer seeks to make a profit out of another man's action, by taking the proceeds of it, or part of them, for himself. Modern public policy condemns champerty in a lawyer whenever he seeks to recover not only his proper costs but also a portion of the damages for himself, or when he conducts a case on the basis that he is to be paid if he wins but not if he loses. As I said in Re Trepca Mines Ltd [1962] 3 All ER 351 at 355, [1963] Ch 199 at 219:

'The reason why the common law condemns champerty is because of the abuses to which it may give rise. The common law fears that the champertous maintainer might be tempted, for his own personal gain, to inflame the damages, to suppress evidence or even to suborn witnesses.'

This reason is still valid after the 1967 Act. In Wallersteiner v Moir (No 2) [1975] 1 All ER 849 at 860, [1975] QB 373,

I will briefly deviate to Wallersteiner, to where Denning's comments become immediately relevant:

English law has never sanctioned an agreement by which a lawyer is remunerated on the basis of a 'contingency fee', that is that he gets paid the fee if he wins, but not if he loses. Such an agreement was illegal on the ground that it was the offence of champerty. [...] Even if the sum was not a proportion of the amount recovered, but a specific sum or advantage which was to be received if he won but not if he lost, that, too, was unlawful: see Pitmann v Prudential Deposit Bank Ltd by Lord Esher MR. It mattered not whether the sum to be received was to be his sole remuneration, or to be an added remuneration (above his normal fee), in any case it was unlawful if it was to be paid only if he won, and not if he lost.

And quite contrary to your apparent proposition that we can gleefully exclude arrangements whereby certain out-of-pocket expenses are paid, that would again seem to go against the judgement in Wallersteiner

Under a contingency fee agreement the remuneration payable by the client to his lawyer in the event of his success must be higher than it would be if the lawyer were entitled to be remunerated, win or lose: the contingency fee must contain an element of compensation for the risk of having done the work for nothing.

Retruning to Trendtex, Lord Denning's comments distinguishing the legal aid system in the UK, to the near absence of same in the USA, and where champerty is practically a quaint artefact, to be relevant to the Irish legal environment

...I do not think they can or should prevail in England, at any rate not in most cases. We have the legal aid system in which, I am glad to say, a poor man who has a reasonable case can always have recourse to the courts. His lawyer will be paid by the state, win or lose. If the client can afford it, he may have to make a contribution to the costs. Even if he loses, he will not have to pay the costs of the other side beyond what is reasonable—and this is often nothing. So the general rule is, and should remain in England, that a contingency fee is unlawful as being contrary to public policy.

Cody Pomeray

I should point out that I do not say that champerty has not evolved since Pittman in 1896, rather simply that some users' confidence in proclaiming that what they believe is legally sound is in fact so, may be guilty of a lack of understanding.

nuac

johnnyskeleton wrote: »

It's expressly recognised as a prinicple of the taxation of fees that in cases taken on a no win no fee basis there can be a mark up to compensate for the uncertainty of payment.

It's perfectly legitimate as a collateral contract with a client that in the event that they cannot afford to pay the solicitors fees at the end, that they will not be sued etc.

I don't think the current Taxing Masters are ruling thus

nuac

Thanks Cody P for a most erudite post

I am still confused, but at a much higher level than before

johnnyskeleton

Cody Pomeray wrote: »

I accept this happens, nevertheless infosys has correctly pointed to occasions in this jurisdiction where the other side was not obliged to discharge costs for which the successful party would not be held liable, if the successful party had failed.

Where there has been no section 68 letter, a solicitor may not be able to claim fees of their client, consequently they will not be able to claim them off the other side.

Where a solicitor carelessly takes on a no foal no fee case and doesn't send a section 68, they may not be able to claim costs (and may also be subjected to law society disciplinary proceedings). However, that is a fairly rare occurrence indeed.

But a no foal no fee arrangement, as commonly understood, is that the fees are not due in the event of an unsuccessful outcome. So it cannot be used against the other side, not least when there is an entitlement to an indemnity of the legal costs against the other side.

So I suggest you have a strong point on the constitutional right to a livelihood, but I would not be confident that the NFNF arrangement, even in its most carefully worded form, would be given the blessing of the Irish courts in the absence of any statutory backing for NFNF which, I think, is badly needed.

Just because one case on champerty involved a contingent fee, does not mean that all no foal no fee cases are champerty. Champerty is the old tort of encouraging another person to take frivolous litigation for a malicious purpose. It is not champerty for, to take an example, a gay rights campaigner to encourage people to challenge discriminatory laws.

So while it cannot be said that a no foal no fee is never champerty, they are two different things and I would question any authority that says that all no foal no fee cases are champerty in all circumstances. A solicitor who encourages an unwilling litigant to bring a spurious case can be guilty of champerty, but the usual remedy for that is an order 99 rule 7 order.

In the case of standard no foal no fee cases in Ireland, they are not champerty. A client will engage the solicitor having already decided to bring a case, the solicitor will outline their fees, and will then say that they will not see to recover their own costs against the client if the case is unsuccessful. Then they will give a section 68 letter. Sometimes they will explain that if the client withdraws or changes solicitor they will require to be paid. Finally, they will explain that even though they will not seek to enforce their costs, the other side can still get costs against them.

There is no payment from the solicitor to the client. Nor are they giving their services for free. They are simply saying that they will not enforce their fees in certain circumstances. That is just not champerty.

Cody Pomeray

johnnyskeleton wrote: »

Just because one case on champerty involved a contingent fee, does not mean that all no foal no fee cases are champerty. Champerty is the old tort of encouraging another person to take frivolous litigation for a malicious purpose.

Can I ask where you are getting that definition? (Specifically, 'malicious purpose'.)

It is not champerty for, to take an example, a gay rights campaigner to encourage people to challenge discriminatory laws.

It is not champerty if the case is taken on pro bono. Champerty demands that a benefit accrues at some stage.

I am not aware of any authority which says that meritorious actions cannot be champertous.

I would pre-empt that you are considering O'Keefe v. Scales [1998] 1 I.L.R.M. 393, where Lynch J said that whilst champerty survives in Ireland, "it must not be extended in such a way as to deprive people of their constitutional right of access to the courts to litigate reasonably stateable claims".

But per Denning in Trendtex, cited above, the legal aid process provides individuals with a constitutional right of access to the courts. And, failing that, Lynch's comments were obiter.

In the case of standard no foal no fee cases in Ireland, they are not champerty. A client will engage the solicitor having already decided to bring a case, the solicitor will outline their fees, and will then say that they will not see to recover their own costs against the client if the case is unsuccessful.

This explanation has been offered a number of times in the thread, without any authority to substantiate it. I don't accept that a perfectly fine explanation, as this is, can disturb the well established common law, albeit strangely lacking in Irish authorities.

I would repeat that the well established common law cannot be abolished at random or without some statutory innovation. YES champerty has evolved, but it's hard to say how it has evolved in Ireland and, absenting any authority or statute, it is not possible to have confidence in the Irish exception that is being proposed in this thread.

johnnyskeleton

Cody Pomeray wrote: »

Can I ask where you are getting that definition? (Specifically, 'malicious purpose'.)

Champerty is a tort under the general rubric of malicious prosecution, or abuse of process. See McMahon & Binchy Chapter 36. Ok, so they don't say that malice is an essential ingredient in such an action, but lets be realistic, a father who pays for his errant son's legal bill out of goodness is not champerty, but the officious bystander, who assist's someone to sue his enemy could be campeterring.

It is not champerty if the case is taken on pro bono. Champerty demands that a benefit accrues at some stage.

I am not aware of any authority which says that meritorious actions cannot be champertous.

I would pre-empt that you are considering O'Keefe v. Scales [1998] 1 I.L.R.M. 393, where Lynch J said that whilst champerty survives in Ireland, "it must not be extended in such a way as to deprive people of their constitutional right of access to the courts to litigate reasonably stateable claims".

But per Denning in Trendtex, cited above, the legal aid process provides individuals with a constitutional right of access to the courts. And, failing that, Lynch's comments were obiter.

A claim for champerty would usually be taken by the person who was sued and who, typically, has an order for costs against an impecunious client, as against the person who put them up to it.

Again, interesting that you mention the benefit accruing. I had understood that the benefit is not just any benefit from the case but a cut of the award. Hence percentage of award fees are not permitted (as they are in the US), but ordinary reasonable costs are not a cut of the award, just as are the intangible benefits of having a more robust constitutional jurisprudence and a fairer society. Maybe no foal no fee cases in tribunals that don't allow costs, for example employment appeals, could be considered champerty.

Don't forget as well that the reason no foal no fee arrangements hold up in Irish courts is because our legal aid system is underfunded. No foal no fee arrangements have built up because there are so many impecunious litigants who wish to bring their cases but don't have the resources. Arguably the problem here is not that the lawyers get paid only if they win, but that if a case is likely to lose the litigant might not get someone to take on his/her case.

While Lynch's comments might be obter, the dicta is that there is nothing which offends public policy in a person bona fides assisting another with the costs of their litigation.

This explanation has been offered a number of times in the thread, without any authority to substantiate it. I don't accept that a perfectly fine explanation, as this is, can disturb the well established common law, albeit strangely lacking in Irish authorities.

I would repeat that the well established common law cannot be abolished at random or without some statutory innovation. YES champerty has evolved, but it's hard to say how it has evolved in Ireland and, absenting any authority or statute, it is not possible to have confidence in the Irish exception that is being proposed in this thread.

Well it shows that Irish no foal no fee cases are different to what was described in Trendex. There is no agreement that a lawyer is to be paid if he wins but not if he loses. There is an agreement that if the lawyer loses he will not enforce his fees. As I say, many solicitors will make it clear to the client that the money is owed to them, just that in one specific situation they will not enforce. If, for example, the client discontinues the case, the solicitor is entitled to claim and enforce his fees against the client. Thus, he cannot be said to agree to be paid only if he wins.

Overall, you have to remember how common law operates. Something is only a civil wrong if it is enforceable and it is generally agreed to be a wrong. Over time, different torts emerge while others fall to the background. Arguably, sexual assault is a different species of trespass to the person which has developed recently (as a tort) as opposed to assault/battery simpliciter. By contrast, can anyone (other than the law reform commission I suppose) really suggest that the tort of seduction still exists?