Richard Moorhead

The paper then considers changes to conditional fee arrangements and the relationship between conditional fee arrangements being proposed in the Access to Justice Bill and the Legal Aid Board’s consultation document on a new approach to merits testing for civil cases via a Funding Code. Crudely summarised, these changes will exclude most personal injury work caused by negligence from the scope of the legal aid scheme and make it more difficult to gain legal aid funding for any dispute where a client seeks damages where there are prospects that the case could be funded by a conditional fee arrangement.

This approach raises a number of issues relevant to policy makers and academics concerned with access to justice issues. Evidence on the response of the profession to CFAs is considered before outlining a set of issues facing policy makers, administrators, lawyers and academics.

The White Paper, which predated the Access to Justice Bill currently proceeding through Parliament heralded a far greater emphasis on conditional fee arrangements (CFAs) in the civil justice system:

Based on that, and an assumption that the developing market for legal expenses insurance supporting CFAs, the LCD also indicated a desire to reduce the availability of legal aid for cases where CFAs were available, which is now reflected in the Access to Justice Bill, particularly through the proposed exclusion of most personal injury cases from the scope of the new legal aid scheme.

The Bill also proposes to make success fees payable not out of damages but by the losing opponent and makes the insurance premium supporting any CFA recoverable against the losing party. In one sense, these reforms simply strengthen the ordinary costs presumption that the loser pays, in another they have been argued as asking the loser to pay twice. Whatever, they provide an interesting twist in the scheme of incentives and an attempt to strengthen the role of CFAs as a provider of access to justice.

The role of conditional fee arrangements and their relationship to legal aid funding poses a number of issues which will be considered in outline by this paper.

• In what ways do conditional fee arrangements, with the accompanying reductions in legal aid funding, extend or reduce access to justice?
• Does the current debate suggest anything about a successful balance between a (currently) judicare legal aid system and the private funding and the conditions necessary for a successful conditional fee system?
• Do conditional fee arrangements raise quality and ethical concerns which should be of concern for administrators and policy makers?
• How should administrators and policy makers deal with the gaps and tensions in a system which accepts commercialisation of risk assessment and service provision?

Firstly, the legal framework and basic descriptions of the type of success-fee arrangements permitted under English law is considered.

There are a number of success-based fee arrangements which can be applied to civil cases. Generally, their basic aim is to encourage clients without the necessary resources or with risk-averse tendencies to take forward claims for compensation. The main types of success-fee arrangements available in England and Wales are:

• Conditional Fee Arrangements (CFAs)
• Speculative Fee Arrangements; and,
• Contingency Fee Arrangements.

There are variants on each of these three approaches but the following are the main paradigms:

• Under a Conditional Fee Arrangement, a solicitor acts on the basis that, if his client loses the case he will be paid nothing. If the solicitor succeeds, the normal fees are paid usually with an "uplift" or "success fee". In theory, the success fee is based on a solicitors’ costs, rather than the level of damages. Conditional Fee Arrangements are, subject to procedural requirements, lawful in all areas save, criminal work, matrimonial disputes and cases involving disputes over children.

• Contingency Fee Arrangements operate on the basis that no fee will be charged unless the solicitor wins; with the fee being determined as a percentage of the damages. Although traditionally regarded as unlawful, some practitioners argue that contingency fee arrangments may be operated under ‘non-contentious business agreements’. Broadly, if this approach is lawful, the scope of contingency fee arrangements is limited to pre-litigation negotiation and most tribunals.
• Speculative fees, are essentially the same as conditional fee arrangements without the uplift or success fee. Reported as a common practice, pre-CFAs, they have only recently been legitimised by the courts. A solicitor is paid their normal fee if they win and nothing if they lose. There is no uplift or success fee. However they are not subject to the same statutory protections as conditional fee arrangements. They are regarded by some lawyers as a quick and easy alternative to conditional fee agreements where cases have very strong prospects of success.

Traditionally solicitors have been unable to charge on a conditional or contingency basis. They have been restricted in acting for conditional fees by case law, by Statute and by Practice Rules. The two main common law principles which have inhibited the development of success-fee arrangements are champerty and maintenance.

Maintenance where someone (such as the client’s lawyer), who is not a party to the action and has no interest in it, funds or otherwise supports one of the litigants. Such an agreement was generally held by the courts to be void for reasons of public policy. It was also grounds for making an order for costs against a non-party funder. This restricted the ability of solicitors to act either conditionally, contingently as they risked significant costs liability, particularly where their clients were impecunious, and could not recover costs against opponents. Such fee arrangements were a lose-lose situation

Champerty is an aspect of maintenance where the third party not only supports a litigant but also takes a share of the damages awarded. It is maintenance with a "division of the spoils". Contingency fees and conditional fee agreements with a success fee would be champertous. As with maintenance, champerty has been held to be contrary to public policy and champertous agreements are void. As recently as 1995, the court found that it was champertous to agree a differential fee arrangement depending on the outcome of the case. In that instance, the solicitor agreed a 20% reduction in his fee if he lost. On this basis, a CFA, even without a success fee could be champertous.

The Courts and Legal Services Act 1990 provided a statutory basis for parties to litigation to enter into conditional fee agreements, but only for specified proceedings. The Act prohibits conditional fee agreements for proceedings in relation to crime and a range of family legislation. Subsidiary legislation sets a ceiling on the size of any success fee to 100% (i.e. a solicitor can claim up to twice their normal fees if successful, but nothing if they lose). The Act also prevents cost orders made in favour of a party to a CFA including any element that reflects a success fee. The effect of this is to prevent the recovery of success fees from unsuccessful opponents and ensures that any success fee is paid out of the successful party’s damages.

Under the, Conditional Fee Agreements Order 1995, conditional fee agreements were permitted for personal injury; bankruptcy, insolvency or administration; and some human rights cases. As of 30th July, 1998, subsidiary legislation greatly widened the range of proceedings where conditional fee agreements are permissible to cover all civil proceedings other than those excluded by the Act (essentially, all cases except family cases).

Another important statutory provision on conditional fee arrangements is contained in the Legal Aid Act 1988. This prohibits the refusal of legal aid, "on the ground (however expressed) that it would be more appropriate… .. to enter into a conditional fee arrangment." This statute-bar specifically prevented the replacement of legal aid by CFAs.

The 1990 Solicitors' Practice Rules provide an extra tier of regulation in relation to conditional fee arrangements. For current purposes, it expects its Law Society Costs Information Code states solicitors should discuss the client certain information. The Law Society have also recommended a voluntary cap on the permitted success fee. Whilst up to 100% of costs can be claimed in addition to the normal costs of the solicitor, the Society recommend that the success fee should not exceed 25% of damages.

The cap is voluntary and operates in a somewhat complex manner. The following examples illustrate. In this example, the successful lawyer’s normal costs were £6,000 (calculated on their hourly rate for the work actually done), and the court awards all of these costs to be paid by the unsuccessful opponent. The case had been assessed as having a 50% chance of success and as a result, the lawyer entered into a CFA with their client with a 100% uplift on normal costs. They also agreed to abide by the Law Society’s voluntary cap on damages of 25%. The client was awarded £5,000 in damages. The outcome of the CFA is as follows:

It is up to the lawyers concerned, in drafting the client, to specify whether a cap provides. It is also open to them to show greater flexibility in how they apply the cap (e.g. they could absorb the VAT effect). A concern for clinets is that, where the costs paid by the other side do not meet the base costs, then they can lose a substantial level of damages, even where the lawyer claims to be operating the cap. To modify the example above, where the costs awarded against the other side were only £4,000, it would be open to the lawyer to claim payment on the following basis:

Thus, in apparently applying voluntary cap only to the success fee (and not to the other costs) the client would only get 24% of the original damages.

This section covers three main contextual points. The main, and often remarked on, difference between the success-fee arrangements permitted in England and Wales and other jurisdictions, the United States in particular, is the general irrelevance of contingency fees to English lawyers. Even where damages claimed are enormous, success fees are related directly to the normal costs of the lawyer for that case. The economic incentives provided by CFAs: to clients, lawyers, and opponents, are different from those provided by CFAs, particularly under the different costs rules. One effect is that, this may prevent lawyers building up ‘war chests’ on the backs of big cases, from which to fund the rest of their caseload. Another is that CFAs may be less open to extreme examples of exploitation and mitigate against some of the ethical concerns associated with contingency fees.

The second point is that, in contrast to the United States, the losing party ordinarily pays the winning party’s costs. This has meant that, even where a client is able to pursue a case under a conditional fee arrangement, they face a substantial risk of having to pay their opponent’s legal costs. Whilst even very expensive cases have been run without the protection of insurance, for most clients insurance is regarded as a necessity.

The third point is that conditional fee arrangements are a comparatively recent addition to most firms’ ranges of fee-arrangements and insurers portfolios of products. Conditional fees have only been available for any cases since 1995. Speculative fees were only officially sanctioned in 1998 and the status of contingency fees under Non-Contentious Business Agreements is not universally accepted. Conditional fees are a new approach, dependent on a new insurance market and the learning curve of the profession and insurers. This learning curve has been steepened by the strong indications that legal aid would be removed from CFA work first given in the Autumn of 1997, which are now being worked through in the Access to Justice Bill and the Legal Aid Board’s Funding Code. The emergence of an insurance market, with its commercial imperative, not only shapes the availability of CFAs to clients, it may also shape the behaviour of firms.

The economic incentives provided by conditional fee arrangements are relevant for a number of reasons. They affect the behaviour of firms and clients in dealing with individual cases. They affect the feasibility of conditional fees generally, or for specific areas of work, and the extent of their take-up. These incentives relate to the nature of the case (costs, risks and levels of uncertainty) as well as the restrictions of the CFA framework itself (the extent to which it can reallocate risk and benefit and cope with uncertainty) and the characteristics of the insurance market.

Bevan et al provide an interesting theoretical, economic analysis of the incentive effects of different costs rules. A very brief summary of the "illustrative and tentative" predictions relevant to Conditional Fee Arrangements are that:

• More high-merit but low value claims will be dropped under the UK system.
• More cases with poorer prospects of success will be commenced under the US system
• Case settlement may be lower in the UK, where parties are not risk averse and are optimistic about their prospects of success
• Where a party is risk averse, they will settle sooner and accept smaller settlements than they would do under contingency fee agreements.

Risk aversion is crucial: not only clients, but lawyers and insurers may display risk-aversion. Aspects of this may set up incentives for:

• Lawyers to do less work, the greater the risk; but conditional fees also contain incentives for quality (they only get paid if they win and what they get paid is related to how many hours they have spent on their case)
• Lawyers to screen cases, only taking cases with high prospects of success and higher levels of damages.

Thomason has shown, in relation to contingency fee arrangements how risk aversion amongst lawyers can lead to settlements which are not in the client’s interest as the lawyer’s gains from proceeding in a case become increasingly marginal to the effort put in. He tested a theoretical model on over 35,000 worker’s compensation board claims and found that:

• Claimants with lawyers were more likely to settle than claimants without lawyers
• Claimants with lawyers were likely to get less than unrepresented claimants
• But claimants with lawyers got significantly more than unrepresented claimants on cases that went to a hearing

Thomason concludes that, contingency fees create a conflict of interest between the lawyer and his or her client which is not inhibited by professional ethics or reputations. Interestingly, the fee-arrangements which Thomason studies are not ‘pure’ contingency fee arrangements, they contain regulated contingent fees and a mixed contingent fee and hourly rate approach which may take it closer to a conditional fee type model.

This analysis suggests conditional fee arrangements have significant problems and these problems become greater the higher the risk aversion of the client, the lawyer or the insurer. They were introduced, however, as an extension of access to justice for clients who were outside the scope of the legal aid scheme (because of modest levels of savings or income); but were unable or unwilling to afford normal hourly fee arrangements. To overcome their inability or lack of willingness to pay, insurance schemes were needed.

The market for conditional fee arrangements is strongly dependent on the existence of After the Event Insurance. Clients who are advised to commence a claim under a CFA agreement can take out cover against the risk of being ordered to pay their opponents costs, their own disbursements (experts fees and so on) and their own barristers fees. This generally leaves their own solicitors costs unpaid, a risk which is borne by their firm under the agreement.

Of the ten known insurers offering relevant insurance, two started providing CFA After the Event Insurance (AEI) in 1995, one in 1996, one in 1997, five in 1998 and one has started this year. This is a new market and one where the insurers are, by their own admission, still finding their way and assessing the commercial viability of the market. The products vary in terms of the cover that they provide (in terms of financial limits on the level of cover, the types of cost, as described above, which are covered and the types of case that they cover). Some schemes confine themselves to certain types of litigation. Premiums vary considerably, with some schemes having fixed rates for predictable cases (such as road traffic areas) and others basing the premium on a variable percentage of the sum insured (up to 40% of the potential costs liability) (often for medical negligence cases). Application fees may also be charged to assess whether a claim should be insured.

There are two main types of AEI policy in use with CFAs. Policies are either individually underwritten or they are issued under delegated authority. Under delegated authority schemes the insurers essentially assess a firm and, if it becomes a member of the insurers scheme, whenever the firm takes a case under a conditional fee arrangement, cover is automatic. Individually underwritten policies are issued on a case by case basis. Firms make an application and sometimes pay a fee. The insurance companies then assess the merits of the application (often in-house) before deciding whether to grant cover and on what terms.

It is possible to get AEI without the benefit of a CFA, indeed one company generally declines to work with CFAs and is about to launch a delegated authority after the event insurance scheme which includes own-solicitors’ costs.

Recent figures suggest that the best estimate for the number of personal injury cases started under conditional fee arrangements is about 60,000. Most of these have been issued under a Law Society endorsed scheme. Figures for other areas of litigation are not known. These figures pre-date any shift in the rules for legal aid which would require more, or all, personal injury cases and some other money claims to be handled under CFAs. They are also spread over a period of about three and a half years.

Figures for 1997-98 show that 74,137 legal aid certificates were issued for personal injury work in that year and the number of firms franchised to do legal aid work was 1,900 and might be thought to represent a starting point for identifying the number of firms who do a significant volume of such work (although up to about 6,500 firms did some legally aided personal injury work and there is no reason to expect all higher volume firms to have legal aid franchises). In comparison, up to about 2,000 firms are on delegated authority schemes for CFA insurers.

Thus, although the size of the CFA scheme is shown to be sizeable and the number of firms comparable to the number of franchisees in the legal aid scheme, the market is still considerable smaller (in terms of numbers of cases) than the current legal aid scheme. Moreover, insurance schemes bring with them a number of costs which must generally be borne up-front by the client, or firm. For the largest scheme, this includes the costs of the premium (£95 for a road traffic accident claim, £155 for other personal injury claims and an application based system for other claims where the fee is set by the company, such as medical negligence). It can also include an application fee. Own Counsel’s fees, and own disbursements, can also be payable up front. There is the related issue of the firm’s work in progress being a greater burden under a CFA scheme than it is currently, because of the Board’s payment on account system. All of these costs raise the issue of how far a CFA scheme would take up the cases left behind once legal aid is withdrawn or reduced for CFAable claims. Conversely, the potential for higher hourly rates and uplifts might increase the profitability of such work, although the impact of the Woolf reforms for civil procedure, designed to reduce unnecessary legal costs and make them more proportionate to the size of damages awarded might reduce the impact of this.

A related issue, in considering the insurance market, is the attitude of insurers to risk and their assessment of the prospects of success of claims. Delegated insurer schemes are generally based on the insurers’ assessment of firms on a number of factors: the volume of their CFA caseload, their quality systems and procedures an their claims record. Individually underwritten policies are usually assessed in house by the insurer or an external expert. AEI policies are generally regarded as preferable on the basis that they are less bureaucratic for firms and less costly to clients. The insurers monitor the firms not the individual cases.

Information on this monitoring is patchy, and mostly comes from solicitors’ firms rather than insurers. Insurers are reportedly particularly keen to police adverse selection of the easy cases, which some firms have funded on a sepculative basis, without the need for a CFA or an insurance premium. In particular, it has been stated that the insurance companies expect high success rates (about 95% is the figure usually quoted), and are prepared to strike firms off their approved insurers’ panels if that limit is exceeded. The insurer’s managing director has said that the main, Law Society endorsed, insurance scheme may not be suitable for firms with a certain profile. This might lead to the exclusion of, or higher levels of insurance costs, for firms doing entrepreneurial, risk-taking or cutting edge work. Unsurprisingly, insurers seem to take a commercial approach to risk assessment adverse selecting out the more difficult cases, with higher risks and costs and adverse selecting in the easy cases which, from the client and the firm’s point of view, do not need insurance.

Before law firms’ response potential response to CFAs is considered, an outline of the Access to Justice Bill’s proposals and the thinking behind them is given. A recent LCD paper summarises the position. It rehearses the following arguments:

• The present civil justice system is too complex, takes too long to deal with cases and it is too costly.
• The number of people entitled to legal aid has gone down, affecting in particular people on modest incomes who are deterred from starting a legal action by the potential costs of litigation.
• The current system does not encourage lawyers to weed out weak cases.
• At the same time the cost of the Legal Aid Fund goes up and up.
• Conditional fees "work".

As a result it suggests the LCD should:

The approach to doing this, as set out in the Access to Justice Bill and the Legal Aid Board’s draft Funding Code, is as follows. The Bill makes a number of structural changes to the Legal Aid system, replacing the Legal Aid Board with a Legal Services Commission (the Commission), and replacing a demand led civil legal aid system with a capped civil legal aid budget (the "Community Legal Service Fund"). In relation to the funding of cases which may be funded under CFAs, the position is as follows:

• The following cases cannot be funded by the Commission: "Services consisting of the provision of help in bringing or defending… .. proceedings for negligence where the alleged damage is to property or the person, other than proceedings for clinical negligence." This excludes many, but not all personal injury claims, from the Community Legal Services Fund. There are other exclusions.
• It is open to the Lord Chancellor to issue directions allowing the Commission to fund particular excluded cases in, "specified circumstances or, if the Commission request him to do so, in an individual case." It is anticipated that the specified circumstances will include, cases with high investigative costs, high overall costs and public interest cases. The Board has indicated that, "in such cases public finds would not cover the full costs of the case but would provide limited funding in support of a conditional fee agreement."
• The Bill repeals the bar on taking CFAs into account in deciding whether to fund civil cases and the Commission, in setting its merits, are required to have regard to alternative sources of funding and the likelihood of the client being able to avail themselves of such funding. The Board has expressed its initial view on this as follows:

The notes accompanying the Bill, indicate two further aims:

• To make conditional fees more attractive, in particular to defendants and to plaintiffs seeking non-monetary redress.
• To provide a mechanism for regulating the uplifts that solicitors charge. In future, unsuccessful litigants will be able to challenge unreasonably high uplifts when the court comes to assess costs.

This it proposes to do by making any insurance premium and any success fee recoverable against the unsuccessful opponent. There has been some suggestion that, whilst this may generally make CFAs more attractive, it may also have knock on effects for the levels of insurance premiums.

Predicting behaviour of firms under new system of civil justice, with significantly different costs rules, and with comparatively little knowledge about the financial structures of most law firms is extremely difficult. Two studies have attempted it. Both admit the difficulty of the task and methodological limitations. They particularly focus on the viability of expecting law firms to bear the working capital and other costs associated with servicing CFAs for clients who would formerly have had legal aid.

The KPMG survey modelled, "a theoretical, entrpreneurial firm operating in a new policy environment, not those of any actual existing firm." It indentifies the "key drivers" of profitability for CFA work, which may provide an indication of the types of work firms will seek to take on:

• A degree of specialisation on the more severe of cases would be more profitable than high volume, low-margin work.
• This profitability might be improved by applying more stringent merits tests to such claims.

The report also concludes that, "personal injury litigation can make significant positive contribution to the overall profitability of a firm of solicitors. This is true on the assumption that clients will be unable to meet over half (60%) of costs up front, and it remains true, albeit at slightly lower levels of profitability, even if clients can meet none of the costs up front." The report’s projections are based on a 10 year viability period.

Shapland et al conducted a study of a small number of actual law firms conducting personal injury work and sought to project the impact of the legal aid reforms on the basis of financial information and information on case-handling gained through interview and a review of the firms’ accounts. For current purposes, the main findings, were:

• Specific problems with CFAs for cases where there were significant questions of liability and serious injury where there was likely to be considerable investigative cost and effort, emphasising in particular industrial disease cases and complex accidents at work.
• The study also emphasises firms’ individual approach to billing and their own financial profiles could have a significant effect on the viability of conditional fee arrangements for those firms. There was some evidence that larger firms might start to dominate the market.
• Smaller firms doing reasonable amounts of personal injury would have difficulty in coping with the cashflow and borrowing requirements of CFAs. This effect is reduced if they concentrate on clients who can afford their own insurance premiums and disbursements.
• Defendant behaviour and local conditions (such as the cost of expert reports) could significantly effect the profitability of CFA work.

A final report provides some insight into the current handling of CFAs. This survey looked at attitudes of litigation firms to CFAs. The noted an expectation amongst all firms that CFAs would generate more work within their firm, but also that, "larger firms [were] expecting to benefit considerably more from CFAs than smaller firms." Although all firms expected similar increases in their reliance on CFAs. They also suggested considerable variability in the existence and quality of risk assessment in firms. Similarly, few firms set or monitored performance targets: 82% had not set a minimum success rate, less than 50% monitored performance against projections of costs, damages and success fees. Only 4% of the respondents had a limit on their total exposure under CFAs. They also reported that, in addition to turning down cases because of their low prospects of success and difficulties in establishing liability, "a significant number of respondents had refused CFA assignments because of the impact on cash flow for their practice."

The costs savings to the Legal Aid Fund of removing all personal injury cases from the legal aid scheme are estimated as being in the region of £37 million. This is a significant sum of money when compared with the budget for civil advice and assistance (where the money might be redirected). There is no objective basis currently available whereby the impact of this redistribution could be assessed. Even assuming it is possible to measure the extent to which, post-reform, there is a reduction in the number of personal injury claims which are funded to successful conclusion, it is conceivable that the benefit of funding other work would have a greater benefit or benefit in social and/or economic terms.

Putting that fundamental question to one side, there are a number of issues which will crucially affect the success of CFA replacement for legal aid.

Risk aversion will have a major impact on the type of cases which are taken on and the progress cases when they are taken on.

Risk aversion suggests a prioritising of cases which will, to an extent, be based on the premise that only cases with prospects of success are funded. However, risk aversion is a social as well as an economic concept. The economic incentives may favour a certain type of client (those with more to gain and with a clearer ability to fund up-front costs). Similarly, given that clients claims can be significantly affected by previous income levels, the system may discriminate against lower income groups.

The prospects of success expected of conditional fee agreements may need to be considerably higher than the prospects of success under the legal aid scheme. Some firms quote success rates as high as 98% and insurers understandably expect high success rates. The Board is proposing to move towards a cost-benefit test whereby cases with prospects of success as low as 50-60% can still be funded where the damages are at least four times the likely costs of the claim. This opens up the possibility that it will be more difficult to get funding for a personal injury claim, than it would be for other types of claim.

This raises an issue as to the extent to which the Funding Code can and ought to take into account conditional fee arrangements and how they are to be funded. If a personal injury claim has 50-60% chances of success and damages at least four times the level of likely costs then the Board might feel obliged to fund where no CFA was in fact available but they might need to persuade the Lord Chancellor to issue a direction covering that case. If they cannot or do not then these personal injury cases will be handled less generously by the mixture of CFA and legal aid funding and other areas of funding. There is also an issue as to the extent to which any exclusion of the personal injury scheme will survive the Human Rights Act.

Similarly, the Board’s proposed guidance for evaluating ‘objectively’ the availability of CFAs, might need to respond to local and regional effects as well as looking closely at the different categories of case contained within the rubric of ‘personal injury’.

All of these difficulties suggest there are significant difficulties in balancing successfully a legal aid system and the private funding of cases by CFAs. It also suggests strongly the need for adequate monitoring of the number of cases being handled under CFAs and some assessment of who does not get CFAs and why. Given that much of this data will only be available in firms and insurers, if it is available at all, then such monitoring will be difficult without regulations requiring certain levels of monitoring. Issuing of court proceedings might be one indicator, but it will not pick up on trends in cases dealt with pre-issue. The incentives provided by CFAs and the Woolf reforms may both effect the number of cases which never see a court even if they do see a lawyer and an insurer

Even if it were to be assumed that all meritorious cases would receive funding under a CFA, the funding arrangements raise a number of issues about the impact on quality of the casework, and the eventual level of settlement and ethical issues about the role of the lawyer in relation to their client and the court. Whilst a number of people are able to regulate these issues in theory, the clients, the insurers, the professions and, where cases are dealt with before a court, the courts themselves, there may be significant difficulties in expecting them to regulate under settlement.

It is not immediately apparent how administrators and policy makers could deal with the gaps and tensions in a system which accepts commercialisation of risk assessment and service provision. The incentives at work on lawyers are complex and require deeper investigation as the insurance market develops and settles down. They may well be significantly affected by the willingness of insurers to claims. A structural concern may develop: insurers will be acting as the gatekeepers to claims to be made, for the most part against defendants who are themselves insured for their legal costs and liabilities.