Improving access to justice for all

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  • Bermudians may be deprived of justice for financial reasons

    Bermudians may be deprived of justice for financial reasons

It is an inconvenient truth that “access to justice” invariably involves associating with lawyers. As everyone knows, lawyers are expensive, especially if they charge by the hour, and litigation is the preserve of the rich and the well-to-do.

In America they have ambulance chasers, with their faces on billboards promising to achieve justice at no cost to you. But we don’t do that here in Bermuda: if you want a lawyer, you need to pay for it — usually up front in the form of a retainer — and if you want to litigate, you must take the risk that if you lose you will end up paying not only your own legal costs but those of your successful adversary.

A good system, some may think: keep the cost of admission high and it will root out the frivolous cases and ensure that only the more meritorious and “valuable” cases expend the limited resources of our civil justice system. It is also advantageous to lawyers, as they get paid regardless of whether their clients win or lose.

But what do you do if you have a meritorious case but insufficient means to pay a lawyer — and not just any lawyer, but a lawyer with the necessary expertise, as well as the expert witnesses that may be necessary to advise on and help to prove your case?

When it comes to litigation of any complexity, a majority of Bermudians are unlikely to be able to afford to fund it, at least without remortgaging their home or using their life savings. Legal aid is available but it is limited to applicants that have a household disposable income of less than $18,000 per year and a disposable capital of no more than $20,000, so it excludes most Bermudians and Bermuda residents. Thus, many are forced to choose between bringing proceedings without proper legal representation or abandoning their claims altogether. Either way, they may be deprived of justice.

Despite the public perception of lawyers as greedy and overpaid, the reality is that many Bermudian lawyers make time to provide legal advice to clients with limited means at no charge — or “pro bono” — or at reduced charge. Others agree to act in litigation and to allow their bills to go unpaid with the implicit or explicit understanding that they will not seek payment unless the litigation is successful, which is a charitable approach, perhaps, but one that could be unethical, or even illegal, under Bermuda law and Bar Association rules as they stand.

One of the reasons the “no win, no bill” practice in Bermuda is of questionable legality arises from the application of the ancient rules of English law known as “maintenance” and “champerty”, which are intended to prevent third parties, including lawyers, from interfering in litigation by having a stake in the outcome.

Recognising that these rules have a chilling effect on access to justice by preventing lawyers from entering into flexible fee arrangements, many countries have abolished or modified the rules against maintenance and champerty. The United States is the most obvious — and extreme — example, but many other common-law jurisdictions have enacted rules and legislation to enable alternative fee arrangements, including Britain, Canada, Australia and South Africa, as well as smaller jurisdictions such as Hong Kong and Jamaica.

In late 2014, the Bermuda Bar Association issued a report on the introduction of alternative fee arrangements in Bermuda, together with draft legislation. The report made 12 recommendations, including that lawyers should be permitted to enter into conditional fee agreements in most civil litigation cases, with certain powers delegated to the Chief Justice for the regulation of CFAs.

A CFA, also known as a “no win, no fee” agreement, is an accord where lawyers agree not to charge their client any fee, or only charge a reduced fee, if the case is ultimately unsuccessful. In the event the case is successful, however, the lawyers will be entitled to their fees plus an agreed amount of percentage “uplift” on those fees — ie, a success fee — in return for taking on the risk of the litigation.

Notably, the Bar Association was not in favour of the introduction of American-style “contingency fees” where the lawyer’s fee is calculated as a percentage of the client’s award of damages, even though such fee arrangements have recently been permitted in England and Wales.

As Bermuda’s Chief Justice stated during a Special Sitting of the Supreme Court to commemorate the opening of the 2013 legal year, “the cost of civil justice is a major threat to the ability of ordinary litigants to enjoy the right of access to the court, which is an element of the right to a fair hearing in civil cases. The scope of civil legal aid has been cut. Almost 20 years ago, an English version of the much maligned US contingency fee system was introduced in England and Wales, and given the moniker ‘conditional fees’ ... it permits lawyers in certain categories of cases to receive result-based fees, avoiding the need for the client to pay upfront legal costs. A Bermudian equivalent of conditional fees is desperately needed to allow the costs of publicly funded litigation to be reduced without depriving deserving litigants of access to justice.”

The social policy objectives of implementing CFAs are multifold: improving access to justice, distributing the financial burden of providing that access across legal practitioners, litigants and the Government, and providing clients with alternative and more economical choices for funding proceedings. There are risks associated with CFAs, including unethical conduct and excessive success fees, but these can be mitigated by ensuring that an appropriate legislative and regulatory framework is put in place, and properly enforced.

Regrettably, the One Bermuda Alliance government was unwilling to meet with the Bar Association to discuss or debate the proposed introduction of CFAs, or alternative solutions to the “access to justice” problem. Comments in The Royal Gazette attributed to the Ministry of Legal Affairs indicated that the OBA government was not convinced there was a “compelling case” for the introduction of CFAs, pointing to criticisms and concerns in Britain about a move to a US litigation culture. While this is a legitimate concern, it overlooks the positive elements of the British experience and that, after allowing tens of thousands of CFAs over 20 years, the British Government updated its legislation, with relatively little controversy, to permit American-style contingency fees, taking the view that the public policy of facilitating greater access to justice outweighed other concerns. It also overlooks that, in Britain, there was already broader “access to justice” available to the average citizen even before the introduction of CFAs than there is in Bermuda today, given the widespread availability in Britain of “Before the Event” legal expenses insurance for personal injury cases and employment disputes, available through most household and motor insurance policies.

I do not suggest that CFAs are the perfect solution, or the only solution, to improving access to civil justice, but they represent one of the best, and one of the most pragmatic, solutions for Bermuda today. A system of civil legal aid encompassing a broader segment of the community, such as existed in Britain until the early 1990s, may be in many ways preferable, as there would be a body — the Legal Aid Board — providing oversight on individual cases and lawyers would remain truly independent in the sense of not having a financial stake in the outcome of litigation.

However, given the realities of Bermuda’s economy and budget deficit, only the most blinkered optimist would believe that a substantial broadening of access to government legal aid is likely. By comparison, there is no need for the taxpayer to fund a system of CFAs.

With a new government now in place, one that professes to be committed to improving the lives of “ordinary Bermudians” and tackling injustices in our society, the time may be ripe for the Government to embrace this initiative.

While I fully understand and accept that the new government has many priorities in these challenging economic times, I respectfully suggest that ensuring “access to justice” for all citizens and residents of Bermuda, as broadly and as efficiently as possible, should be high on its agenda.

Mark Chudleigh is a director of the Bermuda law firm Kennedys Chudleigh Ltd. The views expressed here his alone, and he does not purport to represent the position of Kennedys Chudleigh or the Bermuda Bar Association

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Published Dec 18, 2017 at 8:00 am (Updated Dec 18, 2017 at 10:53 am)

Improving access to justice for all

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