Ethical Complications Of Conditional Fee Agreements (DBA)

Funding litigation and other legal services is expensive whereby parties normally incur considerable costs and so it raises the question of what types of funding is available in England and Wales. Different law firms offer different funding packages to meet client needs and circumstances, these include Conditional Fee Agreements (CFA) also known as ‘no win no fee’ and Damages Based Agreements (DBA). Though, the most common way of acquiring legal services is through Legal Aid where individuals can obtain financial support however, these funding services have limitations and ethical complications which will be discussed in this essay. Moreover, due to the expensive nature of legal services and the lack of funding, this has created a potential
Thus, individuals can turn to legal aid (LA), where the state provides financial support for many vulnerable individuals who otherwise would not be able to afford such services. Originally, LA was limited to just civil cases however government tried to reform LA to deliver a wide range of services to the public. This means that now more people can attempt to reach LA for a variety of different cases, whereas before the criteria was slightly limited. Although LA is attainable to help meet costs of legal services, there are requirements put in place, ‘you will usually need to show that; your case is eligible for LA, the problem is serious and that you can not afford to pay for the legal costs.’ However, there are ethical complications involved, where some caseworkers are faced with contradictory imperatives, pressures and ‘value for money’ demands that they could possibly deceive clients and even prejudge the outcomes of cases. This means that, solicitors might attempt to disclose the outcome of the case to their clients before even attempting the case, this is not
This is where an agreement is made between legal representatives and a party that costs will only be payable in the event that a claim succeeds. Typically, an individual will be advised that if the case is successful they would have to pay a percentage of fee which is agreed upon but if the case is not successful then a fee does not apply. CFA services are available to everyone and people often feel more at ease knowing they only pay if their case is won, therefore not creating a huge risk. This is beneficial to those who can not afford legal, creating more certainty as they will only be paying if their case is won. However, ethical complications arise, where some service providers have failed to honour the agreements made between themselves and the party or have then exploited loopholes in the contracts, causing serious consequences for their clients. This defeats the purpose of the service and raises further issues, leaving the vulnerable client more distressed then they were before. Apart from this, there have been fraudulent claims which have driven up insurance premiums and the fact that CFA promise that the consumer will not pay for a losing case, is being broken. Moreover, an ethical issue arises due to the fact that CFA’s are based on a no win no fee basis, this will