2. Funding of Legal Services

Question 1

For certainty, what three things should be true of a retainer agreement?

Answer 1

1. In writing
2. Contain all relevant terms
3. Signed by the client

Question 2

What should a solicitor do before recommending a conditional fee arrangement or a damages based agreement, and why?

Answer 2

Ascertain whether the client can afford to pay privately (i.e. just pay his fees) as this may be more cost-effective for a client who can afford it

Question 3

What should a solicitor do before recommending a conditional fee arrangement or a damages based agreement, and why?

Answer 3

Ascertain whether the client can afford to pay privately (i.e. just pay his fees) as this may be more cost-effective for a client who can afford it

Question 4

What advice and updates must the solicitor provide on costs?

Answer 4

Clear and transparent advice, updating the client as the case progresses

Question 5

What advice and updates must the solicitor provide on costs?

Answer 5

Clear and transparent advice, updating the client as the case progresses

Question 6

What is the maximum a success fee under a conditional fee agreement can be?

Answer 6

No more than 100% of the normal fees charges, i.e. the total fees recovered can be no more than 2x the bill

Question 7

In what category of proceedings can conditional fee agreements not be used?

Answer 7

Family and criminal proceedings

Question 8

What must a solicitor inform a client of within the context of conditional fee agreements?

Answer 8

If they lose, whilst they won’t have to pay their solicitor anything, they may be liable for the other side’s costs

Question 9

What is the maximum % a solicitor can agree in a damages based agreement?

Answer 9

1. 25% in personal injury
2. 50% in all other cases

Question 10

What is the interplay between the solicitor’s % recovery in a damages based agreement and the costs paid by the losing side?

Answer 10

The % of the damages is worked out and any costs paid to the solicitor by the losing side are subtracted from the damages % for a net figure payable.

E.g. 10% of £500k award and £10k in costs already paid, means the solicitor receives £40k net.

Question 11

What is the interplay between the solicitor’s % recovery in a damages based agreement and the costs paid by the losing side?

Answer 11

The % of the damages is worked out and any costs paid to the solicitor by the losing side are subtracted from the damages % for a net figure payable.

E.g. 10% of £500k award and £10k in costs already paid, means the solicitor receives £40k net.

Question 12

What seven things must a damages based agreement specify?

Answer 12

1. The proceedings to which the agreement relates
2. Circumstances in which costs and expenses are payable
3. Reason for setting payment at that particular level
4. Expected disbursements
5. The definition of success
6. What happens in the event of adverse costs
7. How parties can terminate the agreement

Question 13

What is before the event insurance?

Answer 13

Insurance which covers the solicitor’s legal costs

Question 14

What is after the event insurance?

Answer 14

Insurance taken out after the event, through which disbursements are paid and usually also cover the risk of having to pay costs to the other side if you are unsuccessful

Question 15

What type of fee agreement is after the event insurance often associated with, and why?

Answer 15

Conditional fee agreements, because it protects you from the risk of having to pay your own disbursements and the other side’s legal costs if you lose

Question 16

What two tests must be satisfied to receive legal aid in a civil context?

Answer 16

1. Financial eligibility test
2. Merits test

Question 17

What is required to pass the merits test in a civil context?

Answer 17

It must appear that the claim has a good prospect of success

Question 18

What three situations is civil legal aid available in and what two situations is it not?

Answer 18

Available:

1. Housing disputes
2. Family issues
3. Debt issues

Not available:

1. Contract claims
2. Tort claims (except for birth defects in children)

Question 19

In what circumstance could legal aid in a civil context be withdrawn?

Answer 19

If there is a change in the merits of the case

Question 20

Can a civil legally aided party be forced to pay the other side’s costs?

Answer 20

No

Question 21

What two tests must be satisfied to receive legal aid in a criminal context?

Answer 21

1. Financial eligibility test
2. Merits test (interests of justice test)

Question 22

In a criminal legal aid context, in what two situations is the financial eligibility (means) test not required?

Answer 22

Applicant is:

1. Under 18, or
2. In receipt of certain welfare benefits

Question 23

In a criminal legal aid context, might an applicant have to contribute to their fees?

Answer 23

Yes, depending on their income. Only in the Crown Court.

Question 24

What is required to pass the merits test in a criminal context?

Answer 24

Applicant must show that it is in the interests of justice for them to receive funding

Question 25

Criminal cases in what court automatically satisfy the merits test?

Answer 25

Crown court