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NEW LEGAL RULING TURNS SPOTLIGHT ON IMPACT OF 'NO-WIN, NO-FEE' DEALS

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A new legal ruling on 'no win, no fee' deals, or Conditional Fee Arrangements, has brought the subject into the spo...
A new legal ruling on 'no win, no fee' deals, or Conditional Fee Arrangements, has brought the subject into the spotlight, clarifying a number of disputed issues between insurers and claims lawyers.

The Court of Appeal last week delivered judgment in four linked appeals on the issue of recoverable costs under CFAs. This has started to build the parameters for After The Event insurance fees which have been putting local authorities under stress and causing costs to escalate.

To investigate this matter further Zurich Municipal and the Local Government Association had already joined forces to provide a forum for councils to discuss the advantages and disadvantages of CFAs at a seminar on Monday, 9 June. They are now urging local authorities concerned about the implications of the latest ruling to attend the seminar.

The introduction of CFAs was designed to ensure that reductions in the legal aid budget did not restrict access to justice for those on lower incomes. The seminar will consider the impact has this had on councils, and whether the council taxpayer is picking up the tab.

The programme will provide an overview of the scale of impact CFAs are having on local authorities, looking at identifying good practice and highlighting practical solutions. Speakers include Sheila Boyce, chief executive of ALARM - The National Forum for Risk Management in the Public Sector - and Alan Hunter, claims manager at Zurich Municipal. The afternoon will conclude with a selection of workshops.

Alan Hunter, claims manager at Zurich Municipal, said: 'CFAs were introduced to open up access to justice, but they also created a problem, because the regulations do not clearly set out what constitutes a valid amount recoverable for success fees and insurance premiums, leading to an increase in legal costs.

'Now claimants' solicitors have the ability to charge a success fee, it becomes even more important for defendants to resolve claims quickly and efficiently, before costs escal ate. Local authorities need to ensure that they adopt sound risk management policy around early notification of accidents, following best practice around inspection systems and maintaining records.'

New research has also been commissioned to investigate the impact of the deals and the difficulties councils are facing. The results will be announced at the LGA Conference when Zurich Municipal will be running a seminar on Wednesday, 2 July.

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