Funding and Legal Services Aid Flashcards
What is private funding?
Client pays for the legal fees themselves
- Fees calculated either on hourly rate or fixed fee basis
- Fixed fee cannot be increased at a later date unless the client’s permission is obtained
What is a conditional fee agreement?
No win, no fee agreement. The solicitor receives extra if they win - the success fee
- success fee is expressed as a percentage increase of solicitor’s normal fees
For a valid CFA:
- cannot be used for family matters
- must be in writing
- must state the success fee
- cannot be over 100%
Who pays the success fee of a conditional fee agreement?
It is paid by the client
- The opponent loser does NOT pay the success fee when they are ordered to pay the costs. The opponent only pays the standard costs to cover normal fees
In many cases the unsuccessful party will pay the successful party costs (such as solicitor’s fees and disbursements). But the court will not allow a party to recover its success fee from an opponent
Are disbursements separate from the success fee for a CFA?
Yes - if a client loses, they will not have to pay solicitor any legal fees
But, they still have to pay their disbursements - barristers fees, and opponent’s costs and disbursements
What is a damages based agreement?
If a claimant wins, the solicitor’s fees will be paid out of damages
- If a claimant loses, no payment is made (except disbursements)
- The amount the solicitor is paid is expressed as a percentage of the total damages
- Claimant pays the balance to the solicitor out of the damages award
- If the case is successful, the solicitor is paid a proportion of the damages awarded to their client by way of remedy (rathe than getting charges plus success fee as is the case for CFA)
What is required for a DBA to be valid?
- Total amount taken out by solicitor including VAT cannot exceed 50% of total damages awarded
- 25% cap for PI cases
- 35% cap for damages in employment tribunal cases
- Solicitor must give the client reasons why t reached that figure
- Must be in writing
Example: solicitor to be paid 50% of damages in event of success. Claimant is awarded £120,000
- solicitor may charge £60,000
- solicitor does not also charge the client their fees. Only charges the 50% of damages
What legal expenses insurance is available?
- Before the event insurance - insurance the client already has in place which is usually attached to an existing policy (travel or motor policy). Only covers legal fees
- After the event insurance - covers the client’s disbursements and opponent’s costs. Taken out after a claim has started
- ATE insurer only provides cover if the client has a 60%+ chance of winning
- client bears costs of ATE premiums
What is a litigation funder?
Someone with no connection to the case funs the litigation
- Funder will likely only take the case if the client has a 60%+ chance of winning
Civil legal aid
Only applies to certain cases:
- homelessness
- family cases with domestic abuse
- discrimination cases
- immigration
- care proceedings
- welfare appeals
- special educational needs
Business cases and divorce are not within the scope
What is the merits test for civil legal aid funding?
- Individual has exhausted all possible alternatives
- Individual is only person who can reasonably be expected to bring proceedings
- Case will not be allocated to small claims track
- Due to nature and complexity of case, legal representation is needed
- Client must have a 50%+ chance of success
- Legal aid will not be granted if client can get other funding or a CFA is available
What is the means test for civil legal aid?
- Client must have a capital of £8k (£3k if immigration case) or less
- Client has a gross income of £2,657 per month or less; AND
- Client must earn £733 or less a month in disposable income
- If client receives benefits, they automatically have legal aid unless their capital is above £8k
They will still have to contribute to legal costs if:
- monthly disposable income is above £315; OR
- capital is above £3k
Who is entitled to duty solicitor at police station?
Anyone, regardless of financial means
What is interests of justice test for criminal legal aid?
- Automatically met if client is under 18 or case is a Crown Court trial; or
- Must be in interests of justice - seriousness of consequences
What is means test for criminal aid?
- £12,475 or less income = funded in MC and CC
- £12,475 - £22,325 = MC and CC funded is disposable household income is £3,398 or less
- £22,325 or more = MC ineligible / CC ineligible or may have to contribute
Means test is automatically satisfied if client is under 18 or receives benefits
Why is ATE often taken out with a CFA?
To cover the opponent’s costs and disbursements and the client’s own disbursements if the client loses the case
What claims will be out of scope for civil legal funding?
Business (commercial) matters and divorce are out of scope
- Even if the claimant passes the means test, if the claim is out of scope, they are not eligible for civil legal aid
What is a solicitor’s contractual entitlement to their fees following instructions from a client?
A solicitor can recover fees as they have a contract with the client
- The client enters into a contract with the solicitor by asking them to proceed after receiving the retainer letter setting out the terms of business
Is a solicitor entitled to terminate a contract?
Yes, a solicitor is entitled to terminate a contract with a client for ‘good cause’, such as being asked to behave unethically or argue a case which could not succeed
Where does an implied contract with a solicitor and client arise?
Where a solicitor provides legal services at a client’s request, a contract is implied and a solicitor is entitled to reasonable payment for the work they have carried out
What is the solicitor’s responsibility when advising on funding options?
The solicitor must consider all funding options and must make proper inquiries about funding
What are the rules on referral fees for personal injury cases?
LASPO explicitly prohibits solicitors from paying or receiving referral fees in respect of claimants’ claims for personal injury or death
Is Civil CLS funding available for family disputes?
CLS funding is available for family disputes, provided the client meets the means and merits test
- CLS funding may be available but only if their case is sufficiently strong and they meet the means test
What must applicants pass to satisfy the means test?
The means test considers both the applicant’s capital and income
- Must past both the income and capital eligibility
Are resources of an applicant’s partner considered when calculating the applicant’s means?
Resources of an applicant’s partner are included in the calculation of the financial resources of an applicant, unless the partner has a contrary interest in the dispute
- Applicant would be eligible if after taking away partner’s resources (if they have a contrary interest) their own income level is low and they have no capital (e.g., pass means test)
When is DBA funding most appropriate if the client is a defendant?
If the client also makes a counterclaim
- DBA cannot be used solely for defending a claim
What must be considered for DBA?
The merits/prospects of success of a case
- usually 60% prospect of success
- must also ensure DBA agreements are reasonable and properly explained to clients
What is the success fee in a CFA?
If the case is successful, the solicitor is paid the normal fee (basic fee) PLUS a success fee (the uplift)
- e.g., the success fee might be an extra on top of the normal fee
- the success fee is up to 100% of the normal fee
How is the success fee effectively funded?
As the court does not allow the party to recover a success fee from an opponent, in the case of a Claimant, it effectively comes from their damages
What are the limits to success fees?
- Personal injury = cannot exceed 25% of the damages
- Other civil litigation matters = success may be agreed at 100% of basic fee
A CFA is only a means of funding the solicitor’s costs. It does not provide an option for funding expert’s fees, court fees or other disbursements
What is the success fee?
The uplift paid on top of the solicitor’s normal fee
E.g., success fee might be an extra 25% on top of the normal fee
