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The Courts and Legal Services Act 1990 legalized a form of contingent contract between lawyers and clients in England and Wales. However, it maintained the historic ban on "American-style" contracts where lawyers receive a percentage of winnings in a successful case, but nothing in the event of case loss. The paper looks at the economic rationale for such American-style contingent fees. It then analyses the arguments used for and against them in Britain in the 1989/90 pre-legislation debate. This is done with reference to the theoretical and empirical economic literature such fees have generated. The arguments discussed concern access to justice, the possibility of excessive contingent fees, client-lawyer conflicts of interest and the quantity of litigation under the fees. The conclusion reached is that the British government's position on American-style fees is acceptable, except on the issue of excessive fees, and that it should continue to consider introducing contingent fees. Copyright 1993 by Oxford University Press.