2. Funding of Legal Services Flashcards
For certainty, what three things should be true of a retainer agreement?
- In writing
- Contain all relevant terms
- Signed by the client
What should a solicitor do before recommending a conditional fee arrangement or a damages based agreement, and why?
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
What advice and updates must the solicitor provide on costs?
Clear and transparent advice, updating the client as the case progresses
What is the maximum a success fee under a conditional fee agreement can be?
- No more than 100% of the normal fees charges, i.e. the total fees recovered can be no more than 2x the bill
- no more than 25% for PI excluding damages for future costs
- other party pays the normal fee not the uplift
In what category of proceedings can conditional fee agreements not be used?
Family and criminal proceedings
What must a solicitor inform a client of within the context of conditional fee agreements?
If they lose, whilst they won’t have to pay their solicitor anything, they may be liable for the other side’s costs
What is the maximum % a solicitor can agree in a damages based agreement?
- 25% in personal injury
- 35% employment
- 50% in all other cases
What is the interplay between the solicitor’s % recovery in a damages based agreement and the costs paid by the losing side?
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.
What seven things must a damages based agreement specify?
- The proceedings to which the agreement relates
- Circumstances in which costs and expenses are payable
- Reason for setting payment at that particular level
- Expected disbursements
- The definition of success
- What happens in the event of adverse costs
- How parties can terminate the agreement
What is before the event insurance?
Insurance which covers the solicitor’s legal costs
What is after the event insurance?
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
What type of fee agreement is after the event insurance often associated with, and why?
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
What two tests must be satisfied to receive legal aid in a civil context?
- Financial eligibility test
- Merits test
What is required to pass the merits test in a civil context?
It must appear that the claim has a good prospect of success
What three situations is civil legal aid available in and what two situations is it not?
Available:
- Housing disputes
- Family issues
- Debt issues
Not available:
- Contract claims
- Tort claims (except for birth defects in children)
