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article imageOmbudsman: When will action be taken over No Win, No Fee deals?

By James Walker     Jul 6, 2014 in Lifestyle
The Legal Ombudsman in the UK has asked regulators when action will be taken over consumer complaints regarding 'No Win, No Fee' conditional agreements with lawyers.
Chief ombudsman Adam Sampson wrote to all the major regulators after having heard nothing from them since ordering a report into these attractive agreements between customers and lawyers back in January. This raised several concerns which the regulators have so far failed to respond to, prompting the letter which starts "Having not heard anything in response from you, I am writing directly to ask what plans you have for addressing the issues raised in the report."
The report highlighted a "structural weakness" in the nature of conditional fee agreements that can result in the risk of unrecovered costs for the consumer. Worried consumers can find advice on exactly what they are entering into with no win, no fee agreements using information services for a no win, no fee expert.
The ombudsman says that around 8 percent of its total number of complaints last year revolved around conditional fee agreements gone wrong and warned that "greater consistency" is required in the standards governing the usage and advertising of no win, no fee policies. They even condemned the usage of the term "no win, no fee," saying it can lead to "confusion and misunderstanding."
The ombudsman's concerns are summed up by the case of one unfortunate consumer whose lawyers broke the terms of their agreed no win, no fee agreement, resulting in a bill of £30,000. This is particularly harrowing when you realize that not only have you lost the court case the lawyer is employed to win but also the cash the lawyer was obliged not to take. The regulators have yet to respond but when they do it should be interesting to see what they do to tidy up the "confusing" market of conditional fee legal agreements.
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