Funding Flashcards
What is private funding?
Where a client funds legal work through their own resources.
For individuals they may not have enough money for substantial work but is common for residential conveyancing or preparing a will
For businesses this is the normal way of funding the majority/all of the legal work they need.
What is professional funding?
Legal work that is funded by a trade union or professional organisation.
What is before the event insurance?
BTE is taken out before the need for legal work arises. The insurance policy ‘pays out’ to cover the legal work in the event that it is needed. Could include disbursements.
Often sold alongside other policies (eg included in a household insurance policy for neighbour disputes) - will often have a limit though.
Most commonly relates to litigation. Premiums are generally not recoverable from the other side.
Community Legal Service (CLS)
New name for legal aid.
Strict constraints on who is eligable.
Who is eligible for civil CLS funding?
- Only available to individuals
- For civil claims, the vast majority is not available for CLS funding: relates to children/family disputes, homelessness or domestic violence
- If the client’s income is too hight AND/OR the client has too much capital then they will be ineligible
- If the position is insufficiently meritorious then they will not receive CLS funded assistance
What are conditional fee arrangements and how are the calculated?
Type of ‘no win no fee’ agreement.
Means the solicitor will not get paid unless the case is successful.
If the case is successful the solicitor will be paid the normal fee but a success fee of up to 100% on top of the normal fee - usually 25%.
Court will not allow a party to recover the success fee from an opponent so the success fee comes out of the claimant’s damages.
In personal injury cases the success fee must not exceed 25% of the general damages for PSLA and damages for pecuniary loss (other than future).
Does not cover disbursements or opponents costs.
What is a damages based agreement and how is it calculated?
DAB: a type of no win no fee agreement.
If successful, the solicitor is paid a proportion of the damages awarded to their client by way of remedy.
Caps:
25% of the damages in personal injury cases
35% of damages in employment tribunal cases
50% of damages in all other cases
Does not cover disbursements or opponents costs.
What is after the event insurance?
ATE policies are taken out in order to help the client cover the costs of litigation once a dispute has already arisen. It is one way of funding costs associated with civil litigation.
Will usually cover client’s own disbursements and their opponents costs and disbursements in the event of losing their case. Often used in conjunction with a CFA or DBA. CFA/DBA will cover own clients costs and the ATE covers disbursements and opponents costs.
Not recoverable from the other party.
What is third party funding?
Funding is provided by banks, private equity firms or hedge funds. In the event the claim succeeds the funder receives their money back plus an uplift.
Who can receive free legal advice at the police station?
All suspects are entitled to free legal advice at the police station regardless of their means.
This is limited to telephone only advice for non-imprisonable offences.
Who gives legal advice at the police station?
Accredited representatives (PACE)
Not just solicitors: can be trainees, paralegals or ex-police officers. Any reference to solicitors at the police station should be taken to include accredited representatives.
Solicitors must also complete the accreditation process in order to attend at the police station under the Legal Aid Agency contract.
Is a client entitled to public funding for representation at court?
If they are not paying privately then the cost of their defence may be covered by public funding through the Legal Aid Agency.
To obtain a representation order, a defendant must pass two tests:
- the means test
- the merits test (interests of justice test)
When are defendants passported through the means test?
Passported through means they automatically pass the means test and do not have to complete the Financial Statement for Legal Aid in Criminal Proceedings form (CRM 15).
- Defendants under 18 years old and/or
- those on specified welfare benefits such as Universal Credit and income-based jobseeker’s allowance.
Means test: magistrates’ court
Initial assessment: works out weighted gross income (generally includes partners unless partner is complainant/witness for prosecution or co-defendant in conflict with applicant)
- weighting is applied to take into account the number of people living in the household.
Eligible for public funding: below £12,475
Ineligible for public funding: above £22,325
If in between - will be required to undertake a full means test to establish annual household disposable income, if below they will be funded (£3,398 or less).
Can apply for eligibility review if they have failed the means test or a hardship review is they have unusually high outgoings or defence costs, suspects error or circumstances have changed.
Means test: Crown Court
Applicant is assessed on their income and capital.
- After a combined capital and equity allowance of £30,000, applicants can be required to contribute any balance towards their defence costs.
Annual disposable income:
Ineligible for public funding: £37,500
Eligible: £3,398 or less
In between: eligible with a contribution - 90% of disposable income for a maximum of 6 months
Can apply for eligibility review if they have failed the means test or a hardship review is they have unusually high outgoings or defence costs, suspects error or circumstances have changed
