Amid all the hoo-ha over the headline aspects of the government’s reforms to civil litigation - the end of many of the rules underpinning conditional fee agreements in personal injury, for example - it is easy to overlook a rather quieter change that could have a big impact on commercial solicitors at the lower-value end of the market.

As part of its drive to bring down the cost of litigation, the government is planning to essentially de-lawyer the legal process for small-scale disputes, raising the small claims limit from £5,000 to £15,000, and simplifying the small claims process to make this possible.

Of course, from a lawyer’s point of view, the major downside of the small claims court is that legal costs are not recoverable from the losing party. Given that a claimant will still have to pay their lawyers’ fees even if they win, most prefer to go it alone.

So the hike in the small claims limit will potentially take a chunk of work away from the smaller law firms that were servicing that market, many of which are already feeling the pain of increasing professional indemnity premiums, a deflated property market, legal aid cuts and the threat to personal injury funding.

But at the same time, the Jackson reforms could throw a lifeline to lawyers involved in low-value litigation, or indeed present more innovative law firms with the chance to turn a decent profit on a large scale.

While a claim for up to £15,000 will no longer allow solicitors to claim their legal fees from the other side when they win, under the Jackson reforms, lawyers will be able to enter into a contingency fee arrangement with the client, enabling them to take a cut of the damages. The government bill implementing the reforms does not set a cap on the percentage of damages that solicitors will be able to take, though one could be introduced through secondary legislation. In employment tribunal cases, where contingency arrangements are already allowed, the cap is set at 35%.

Clearly we are not talking megabucks here, as these are relatively small claims (though significant enough to the parties involved). But given that the process of litigation in the small claims court is to be simplified even further, contingency fees could lead to a reasonable reward for the work involved.

And for a more innovative firm looking to adopt a streamlined, commoditised approach, carrying out these claims in large numbers with effective use of non-qualified staff, this could be an attractive area. Indeed, firms could capture many of the claims that are simply never brought under the current system, with clients reluctant to pay legal costs which they will not recoup even if they win, but lacking the time or confidence to bring proceedings on their own.

That may mean more claims, and more lawyers, in the small claims system - neither of which will have been the government’s intention.

But if contingency fees offer a mechanism whereby more people and small businesses will achieve justice in their disputes, that can only be a good thing.

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