Description
On 27th February, 2012, the Attorney General requested that the Law Reform Commission (“the Commission”) review the law governing conditional or contingency fee agreements, with a view to reform. The primary objective was to consider whether these agreements should be permitted and
regulated by law in the Cayman Islands. The referral followed the case of Latoya Barrett v Attorney General [2012] 1 C.I.L.R. 127, a personal injury claim involving conditional fees and uplift, in which the Honourable Justices recommended a review of the relevant legal framework
Terms of Reference
The Commission undertook a review of relevant legal models and international and examined the approaches taken by other Law Reform Commissions.
The Commission examined two main issues:
(a) conditional fee agreements – commonly used in jurisdictions such as the United Kingdom,
Australia, and New Zealand; and
(b) contingency fees – more familiar in countries such as Canada and the United States.
Outcomes
On 29th December, 2015, the Commission published a Discussion Paper titled “A review of litigation funding in the Cayman Islands – Conditional and contingency fee arrangements”, along with the Private Funding of Legal Services Bill, 2015, for public consultation.
The Discussion Paper examined:
(a) conditional fees – legislative recognition and regulation in the Cayman Islands;
(b) historical background and legislative development in other jurisdictions;
(c) development of conditional fee agreements and other forms of litigation funding in the United Kingdom;
(d) arguments in favour of contingency fee agreements;
(e) conditional fee and contingency fee agreements in other jurisdictions; and
(f) recommendations for the way forward in the Cayman Islands.
The consultation period commenced on 29th December, 2015, and concluded on 30th April, 2016. On 30th September, 2019, the Commission submitted its Final Report titled “A review of litigation funding in the Cayman Islands – Conditional and contingency fee arrangements” to the Attorney
General. It was supported by a proposed Private Funding of Legal Services Bill, 2019 and Private Funding of Legal Services Regulations, 2019.
Key recommendations from the Final Report include:
(a) legislating to regulate conditional fee agreements in the Cayman Islands;
(b) allowing two types of contingency fee models:
(c) allowing parties and their attorneys flexibility to choose and structure the funding arrangement
best suited to their case.
The Private Funding of Legal Services Bill, 2020 was passed by Parliament on 16th December, 2020, received assent on 6th January, 2021, and came into force on 1st May, 2021. The Private Funding of Legal Services Regulations, 2021 came into effect on 2nd May, 2021.
Publications