Traditionally ‘no-win-no-fee’ funding for litigation hasn’t generally been accepted in Turks and Caicos. Such arrangements between a lawyer and client, more technically known as conditional or contingent fee arrangements (CFAs) are, in Turks and Caicos at least, considered to be against public policy for various reasons. In this respect Turks and Caicos diverges significantly from other jurisdictions, including much of the Commonwealth, the UK and many parts of the US where CFAs are to a greater or lesser extent recognised.
In 2021 however TCI’s Supreme Court delivered a significant judgment in relation to CFAs. It decided that in certain circumstances CFAs were actually consistent with public policy and should be allowed. We’ll look at the judgment below and what it means. In particular we’ll consider whether the Supreme Court’s decision will open doors to litigation for people who were previously prevented from pursuing a legitimate case because of the prohibitive cost.
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Conditional Fee Arrangements And Contingency Fees: What Are They?
Both conditional and contingency fee arrangements provide that the lawyer will only receive payment if the client succeeds in his or her case. The amount the client pays in fees under a contingency fee arrangement will normally be a percentage of the damages awarded. Under a conditional fee arrangement the legal fees are still only payable in certain circumstances but the amount is not linked to the compensation the client is awarded.
Under the common law developed by judges over centuries these types of arrangements were prohibited. Largely this was down to public policy reasons – the feeling was that financing legal cases in this way was open to abuse. That said many countries have allowed CFAs for some time.
No-Win-No-Fee In Turks And Caicos
While CFAs have not been formally authorised in Turks and Caicos judges have shown themselves to be flexible when examining disputed lawyer/client fee arrangements. In 2004 for example in the case of Kellar the Privy Council on appeal from the Turks and Caicos Court of Appeal made clear that its judgment in the case shouldn’t be interpreted as accepting without question the traditional doctrine of common law that all CFAs are unenforceable on grounds of public policy. The court emphasised that the content of public policy can change over the years, and that now may be a good time to reconsider the accepted prohibition in the light of modem practising conditions.
TCI Supreme Court’s View on CFAs: Regent Grand Management Ltd 2021
Fast forward to July 2021when the TCI’s Supreme Court was asked to consider whether CFAs should be recognised. The judgment in Regent Grand Management Ltd. is crucial not just for lawyers in TCI but more importantly for individuals and businesses who wish to take advantage of the inherent flexibility of CFAs.
We don’t need to go into the detail of the cases examined in the judgment. What matters is that the court seemed to – informally at least – recognise the value and validity of CFAs in certain circumstances. In a key section of the judgment the court referred to the 2004 case of Kellar we mentioned above. It indicated that even though twenty years had passed since that judgment TCI remains bereft of the availability of the legal aid system that had been highlighted in 2004. In these circumstances the Court felt it should ensure so far as possible, that less well off individuals, like the well-to-do, have that access to justice which is an essential ingredient of a modern civilized society. For good or ill the court seemed to be saying CFAs are one way that litigation and dispute resolution can be made available to those who would otherwise be excluded from accessing it.
While the case certainly doesn’t green light the widespread use of CFAs in Turks and Caicos, the opening is now there for lawyers and their clients to seek court approval of CFAs that previously would have been illegal. It also raises the possibility that the TCI government may wish to introduce legislation to officially approve some forms of CFA on Turks and Caicos
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Funding your case is always an important issue to consider before you take any legal action. We offer flexible funding arrangements and are happy to discuss these with you on a no-obligation basis. For initial guidance, please schedule a meeting with a lawyer at ParrisWhittaker today.
