No Win No Fee Agreements with Spanish Lawyers
It was not until 2008, when the Spanish Supreme Court got its hands on this controversial matter that Spanish lawyers were at liberty to agree on pure conditional fee arrangements, better known as no-win no-fee, or “pactum de quota litis“. Because up until then, it was actually forbidden for lawyers in Spain to work freely in pursuit of a favourable result for their client, upon which they would share the proceeds of the recovery.
This prohibition was removed by the Tribunal for the Defense of Free Competition, who established that any rule preventing a client and a lawyer from freely fixing their fees was a restraint to free competition, declaring any regulation to the contrary null and void, at which point they also fined the Spanish Law Society with €180,000. On appeal, the National Audience revoked this decision but, on further appeal to the Supreme Court, the original ruling was upheld (though the fine removed).
Detractors of this arrangement consider that these types of agreements do not guarantee civil justice and that legal professionals “cherry pick” only the strongest claims, which are most likely to succeed. In sum, that they make lawyers party to the claim (conflict of interest), diverting them their ‘statutory’ functions i.e. serenity of judgment, independence and dignity, collaboration with justice and moral integrity, all of them alien to the concept of “ambulance chaser”, a term that came in handy to shame campaigners of the conditional fee agreement.
Supporters claim that this system allows people with few financial means access to the court which otherwise, could not afford. In this context, no win no fee also provides significant motivation to the lawyer to work diligently on the client’s case whereas, if the fees are fixed, it would makes little economic difference for that lawyer whether the client has a successful outcome to the litigation. Finally, it is also argued that the number of speculative, frivolous or unmeritorious cases may be reduced.
Arguments for and against are equally respectable but, in today’s socio-economic world, it would seem daft to uphold restraints to private agreements between clients and their lawyers, in the context of free competition, even in spite of the semi-prohibition of the Charter of Core Principles of the European Legal-Profession.