Funding legal services

Question 1

When must a costs officer inform the SRA?

Answer 1

Where the reduce amount of costs in a solicitors bill by more than 50% in a non contentious matter

Question 2

What is contentious business?

Answer 2

Work done in relation to proceedings, once they’ve been issued
NOT resolving claims via online pre action portals

Question 3

4

Conditions for contentious business agreements to be enforceable?

Answer 3

1. state it is a contentious business agreement;
2. in writing;
3. signed by the client
4. contain all the terms

Question 4

If a business agreement is enforceable can the client apply to court for assessment of costs?

Answer 4

No unless for hourly rate
BUT the court may set aside the agreement or reduce remuneration if it is unfair or unreasonable.

Question 5

What is Non contentious business

Answer 5

‘Any business done as a solicitor which is not contentious business’
(eg conveyancing or commercial drafting)

Question 6

Conditions for non contentious business agreement to be enforceable?

Answer 6

1. in writing
2. signed by client
3. contain all terms of agreement (including whether disbursements and VAT are included in the agreed remuneration).

Question 7

What is a Conditional fee agreement (CFA) (no win no fee)

Answer 7

Pay different amount depending on outcome of case:
LOOSE: Sol receives no OR less than normal payment=client pays opponents costs

WIN: Sol receives normal or higher than normal payment
Success fee (higher fee than normal) must be expressed as a % increase of fee payable if no CFA
Normally based on sols usual hourly charging rates

Question 8

What CANT a CFA be used for?

Answer 8

Criminal or family proceedings

Question 9

Requirements for CFA to be valid

Answer 9

1. NOT used for family proceedings
2. In writing
3. State percentage by which the normal fee is to be increased.
4. Cap: Max 100% uplift on normal charges (additional cap of 25% general damages for PI)

Question 10

CFA: can disbursements be recovered?

Answer 10

Yes BUT most firms exclude so don’t risk being out of pocket (=client will have to pay if looses)

Question 11

What is a damages based agreement (DBA)

Answer 11

Solicitors fee is an agreed % of compensation received (aka. contingency fee)
* WIN: Amount paid is net of costs payable by opponent (= client pays balance)
* LOOSE: client not responsible for sols own fees but may still be liable for disbursements and opponents costs

Question 12

Who CANT use a damages based agreement?

Answer 12

non-counterclaiming defendant

Question 13

Cap for DBA?

Answer 13

• 50% sums recovered by client Inc:
  ◊ VAT
  ◊ Counsels fees
  ◊ NOT other disbursements
• PI=25% general damages received for pain, suffering, and loss of amenity and damages for pecuniary loss (other than future pecuniary loss)
• Employment=35%

Question 14

Requirements for DBA to be enforceable?

Answer 14

• In writing
• Specify proceedings to which it relates
• Specify circumstances in which the fee is payable
• Specify reason for setting the fee at the level agreed

Question 15

Is 3rd party funding for litigation allowed?

Answer 15

Yes in the absence of impropriety or wrongdoing

Question 16

When will third party typically only fund litigation

Answer 16

• Commercial claimants
• Over 60% chance of success

Question 17

6

When is civil legal aid available?

Answer 17

1. Facing homelessness
2. Family cases for domestic abuse victims
3. Subject to discrimination
4. Immigration
5. Care
6. Exceptional circumstances (eg. refusal would be HR breach)

Question 18

Broadly, how is eligibility for civil legal aid determined?

Answer 18

1. Merits test
2. Financial circumstances

Question 19

Civil legal aid: what is the merits test for legal help and help at court?

Answer 19

Sufficient benefit test:is there a sufficient benefit to the client, having regard to the circumstances of the case, including the client’s personal circumstances, to justify the work being carried out.

Question 20

Civil legal aid: what is the merits test?

Answer 20

• Prospects over 50%
• Monetary claim: Balance likely damages against costs involved
• Non monetary claim: Do benefits justify likely cost such that a reasonable privately paying client would be prepared to proceed

Question 21

Civil legal aid: what is the means test?

Answer 21

Capital and income (inc partners) must not exceed£8000 (£3k for immigration)
1. Gross income under £2657 (higher if have over 5 kids)
2. disposable income under £733 (deduct family circumstances and basic living expenses)
3. Even if below limit, assessment may reveal that the client can afford to pay something towards their legal costs
4. For licensed work if monthly disposable income is above £315 or their capital above £3,000 legal aid will be offered to the client on the basis that they make a contribution towards their legal fees.
5. If the contribution is from income it will take the form of monthly payments.

Question 22

Civil legal aid: effect of benefits?

Answer 22

Benefits=automatically qualify in income (not capital)

Question 23

Civil legal aid: what is the statutory charge?

Answer 23

If client benefits financially from the case, any money or property the client receives can be used in repayment of the solicitor’s fees.

Question 24

Form for applying for criminal legal aid?

Answer 24

CRM14

Question 25

2 tests for applying for criminal legal aid?

Answer 25

1.Interests of justice test
2. Means tests

Question 26

7

Factors to take into account for interests of justice test?

Answer 26

1. likely to loose liberty/livelihood
2. Sentence suspended/non-custodial sentence and if broken, could be charged with original offence
3. Consideration of substantial question of law
4. Serious damage to reputation
5. Unable to understand proceedings/state own case
6. Proceedings involve tracing, interviewing or expert cross-examination of witnesses
7. In interest of another that D represented (eg. witness NOT family)

Question 27

3

Crim LA: when will you automatically pass without the means test?

Answer 27

1. Income support, income- based jobseeker’s allowance, guaranteed state pension credit, income- based employment and support allowance or universal credit;
2. Under 18.
3. Crown court trial

Question 28

Crim legal aid: what to do if you dont automatically satisfy means test?

Answer 28

application review on grounds of hardship (Form CRM16) OR form CM15 and evidence of financial details

Question 29

Crim legal aid: how to work out the means test?

Answer 29

1. Consider adjusted income
* less than £12,475=eligible
* £12,475-£22,325=do full means test
* Over £22,325=not eligible in MC, do full means test for CC
2. Full means test
calculate disposable income: gross annual income LESS:
(a) tax and NI
(b) annual housing costs
(c) annual childcare costs
(d) annual maintenance to former partners and any children and
(e) an adjusted annual living allowance.

MC-entitled if annual disposable income is £3398 or less
CC- if disposable income is more than £3,398 and less than £37,500, may mean client can afford to make some contribution to costs

Question 30

What happens with a representation order if case moves from MC to CC?

Answer 30

automatically extend

Question 31

How does a solicitor claim costs for Crim legal aid?

Answer 31

Claim coss incurred under representation order from LAA

Question 32

If a matter turns out to be more expensive than a fixed fee, can the client be charged for it?

Answer 32

NO unless the client agrees

Question 33

Criminal LA: when is a spouses income not included in the means test?

Answer 33

When they have a contrary interest in the dispute