New Draft Regulations On “No Win/No Fee” Published

The Ministry of Justice have published draft regulations on regulating damages-based agreements (e.g. “no-win, no-fee” / contingency fee agreements) dealing specifically with employment tribunal cases in England and Wales. The draft regulations deal with:

– The provision of information to clients including costs and expenses payable and the reason for the fee level;
– A cap on fees equal to 25% of damages (plus VAT);
– Fees to be on a reasonable hourly basis where the agreement is terminated; and
– A requirement for clients to be notified of other possible funding options.

There will now be a period until 8 January for representations on the draft regulations, and a proposal to bring the regulations into force in April 2010.