Why are contingency fees controversial?

This method of calculation is the primary source of controversy surrounding contingency fees. First, it is said that contingency fees unfairly take from the client's hard won compensation. Second, it is said that the method of billing encourages no-win, no-fee lawyers to only accept those claims that offer them the prospect of the greatest payment through contingency fees, leaving clients with more difficult cases without legal representation.

Contingency fees are defended on the basis that they allow access to justice for clients who otherwise would not be able to afford litigation. Contingency-fee agreements certainly do open up the market to legal services for less wealthy clients. On this basis, they are said to be a good thing because otherwise, with Legal Aid failing to cover all types of disputes, many people would simply not be able to pursue their rightful claim, no matter how strong it was.

Further, contingency fees are said to be a rightful reflection of the degree of risk that a no-win, no-fee lawyer is taking on by undertaking the claim for the client without guarantee of payment. The higher fee is thus said to compensate the no-win, no-fee lawyer for this risk. And, the higher fees are said to be required to be charged in order to compensate the no-win, no-fee lawyer for all the unsuccessful cases they have taken on under contingency-fee agreements without receiving any payment for them and thus running them at a loss. Such arguments make some degree of sense so long as the level of contingency fee set by the no-win, no-fee lawyer is calculated to reflect the degree of risk involved in the particular case under consideration, rather than simply charging a premium on all cases.

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