Funding of Legal Services

Question 1

What are the different ways of funding litigation matters?

Answer 1

Private Funding
Conditional Fee Arrangement
Damages Based Agreements
Third-Party Funding
Before/After the Event Insurance
Union Cover
Civil/Criminal Legal Aid

Question 2

What are the different ways of funding non-litigation matters?

Answer 2

Private Funding
Fixed Fee Financing

Question 3

How does the fee work in Private Funding?

Answer 3

Client pays for the representation themselves, fee agreement is part of contract

Question 4

How does the fee work in a Conditional Fee Agreement?

Answer 4

Win= Client pays solicitors “success fee”
Lose= Client pays no fee to own solicitor

Question 5

How does the fee work in a Damages Based Agreement?

Answer 5

Win= Client pays solicitor % of damages recovered
Lose= Client pays no fee to own solicitor

Question 6

How does the fee work in Third Party Funding?

Answer 6

3P covers client’s costs (but not other side’s costs)

Question 7

How does the fee work in Before/After the event Insurance?

Answer 7

Before: insurer pays legal costs
After: Insurer pays disbursements (litigation expenses) and other side’s costs if they lose

NOTE: After the event insurance often associated w conditional fee agreement

Question 8

How does the fee work in Union Cover?

Answer 8

Client’s union covers legal costs

Question 9

How does the fee work in Civil Legal Aid?

Answer 9

Public funding available for client in a civil case if the following is met:
- Firm must be contracted with the Legal Aid Agency
- Financial Eligibility Test (individual circumstance)
- Merits Test (claim has good prospects for success)
- The claim is a housing, family, or debt dispute

Question 10

Can Civil Legal Aid be withdrawn?

Answer 10

Yes, if there is a change to the merits of the case

Question 11

Can Civil Legal Aid be used to cover the other party’s costs?

Answer 11

No

Question 12

How does the fee work in Criminal Legal Aid?

Answer 12

Public funding available to criminal defendants if the means and merits tests are met:

Means Test: Clients finances are considered. If client under 18 or is on welfare benefits, means test is met

Merits Test: Client must show that it is in the interests of justice for them to receive funding (e.g., is the client about to lose their liberty or livelihood, can they present their own case etc.)
- Cases heard in the crown court meet this test automatically