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Contingency fees must be opposed ‘as a matter of principle’

Allowing lawyers to have direct financial interests in the outcome of client matters poses a “serious risk” of compromising that lawyer’s fundamental ethical obligations to the court and clients, argues one legal advocacy group.

user iconJerome Doraisamy 16 March 2020 Big Law
Pauline Wright
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In a statement last Friday, the Law Council of Australia said it opposed the introduction of contingency fees, with board directors of LCA coming to such a resolution “as a matter of principle”.

“A fundamental concern [is] that contingency fees could not be introduced without adversely affecting litigants’ interests and lawyers’ ethical duties,” LCA said.

“I am a passionate advocate of promoting access to justice, but I do not accept that contingency fees will promote that objective,” LCA president Pauline Wright added.

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“Should any government in Australia propose any contingency fee arrangements, the Law Council will have to carefully consider that proposal as against all the legal profession’s fundamental obligations.”

LCA’s comments follow consideration by the Victorian government to allow plaintiff lawyers to claim a percentage of the amount recovered in a successful group claim as their costs payable in the proceeding.

It was considered, LCA mused, that the model proposed could create a conflict of interest between the solicitor and the client, requiring solicitors to run the risk of adverse costs orders and security for costs.

“In most jurisdictions in Australia a ‘no win-no fee’ arrangement is available that enables civil claims matters to be taken on for clients without deep pockets and matters that merit litigation in the public interest,” Ms Wright said.

“Public interest cases would not benefit from the introduction of percentage-based fee agreements, and neither would low income matters.

“Percentage-based fee agreements would only benefit large law firms that are already billing via conditional fee arrangements – generating a higher premium with no commensurate increase in risk.”

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