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Unit 9 > Funding Options & ADR > Flashcards

Funding Options & ADR Flashcards

1
Q

What must lawyers discuss with clients about costs at the outset of a matter?

A

Best available information they can give about likely costs and potential liability for the costs of the other party

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2
Q

What is the general litigation costs rule under r44.2?

A

An unsuccessful party is ordered (at the court’s discretion) to pay the the winning party’s costs

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3
Q

What should be the final option where there is no insurance cover or no win no fee available to a client?

A

Private funding

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4
Q

What is private funding based on?

A

An hourly rate plus disbursements

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5
Q

What method of funding assists clients who don’t qualify for legal aid?

A

Unbundling legal services

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6
Q

What are four key methods of assistance provided in unbundling legal services?

A

Self help packs / advice about specific steps or issues / checking or drafting documents / advocacy

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7
Q

What types of cases is unbundling legal services suitable for?

A

Small personal injury claims and consumer claims where there are no other alternatives

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8
Q

What is legal expenses insurance?

A

Before the Event insurance taken out as part of insurance policies. If legal expenses are included, both parties costs are likely to be covered

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9
Q

What should a solicitor do if the client may have legal expenses insurance?

A

Check if the policy covers expenses, that the level of cover is sufficient and check for any excess to be paid

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10
Q

In which cases may costs be covered by a sponsoring organisation?

A

Employment matters or accidents at work

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11
Q

What are CFAs regulated by?

A

The Conditional Fee Agreements Order 2013

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12
Q

How can a CFA help a client decide to proceed with a case?

A

It gives them the security of knowing they won’t have a large costs bill.

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13
Q

Under a CFA, what does a client pay if they win their case?

A

Their lawyer’s costs at an enhanced (higher) hourly rate. They may seek costs from the other party but they will may be liable for any shortfall depending on the terms of the CFA

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14
Q

What does ATE insurance cover in the event of a loss where a client has a CFA?

A

The liability of the other party’s costs and disbursements. These are expensive though as the client is already in dispute.

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15
Q

What are two key points to remember when drafting a CFA?

A

The agreement must be in writing and give the % of success fee paid to the firm.

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16
Q

What is the percentage limit for enhancing fees in CFAs?

A

100% for most cases, 25% for personal injury

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17
Q

What three things will a solicitor take into account when deciding whether to enter into a CFA?

A

Complexity / likelihood of success / time involved

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18
Q

When were DBAs introduced and what regulates them?

A

2012, regulated by Damages-Based Agreements Regulations 2013

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19
Q

How is a solicitor paid if a claim is successful under DBAs and what limits are there?

A

A percentage of the damages awarded (contingency fee) limited to 25% in personal injury and 50% in other cases. The court will then assess the proportionality of this figure under Part 44

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20
Q

What costs are recoverable under a DBA and which are not?

A

Solicitor’s and Counsel’s fees are recoverable but upfront expenses (e.g medical reports) and ATE insurance premiums are not

21
Q

Why are DBAs not very popular?

A

Sometimes % share does not cover the solicitor’s costs / in higher awards the client may be unhappy with the solicitor being paid lots for little work.

22
Q

What is the difference between CFAs and DBAs in the percentage a solicitor receives in a successful claim?

A

In CFAs it is a percentage uplift of the hourly rate, in DBAs it is a percentage of the damages

23
Q

What is the difference between the limits on success fees in CFAs and DBAs

A

PI is limited to 25% in both, but in CFAs other cases are limited to 100% whereas in DBAs other cases are limited to 50%

24
Q

What is Qualified One-Way Costs Shifting? (QOCS)

A

It modifies the ‘loser pays’ rule in personal injury claims so that a losing claimant will not have to pay their opponent’s costs but a losing defendant still will

25
Q

What are litigation funding arrangements?

A

A CFA in which a private commercial third party funds a litigant’s legal costs in return for a share of any success fee. It has a voluntary code of conduct.

26
Q

What are three key aspects of the voluntary code in relation to litigation funding agreements?

A

Funders must maintain adequate financial resources / Funds must behave reasonably and only withdraw in specific circumstances / Funders cannot control the litigation or jeopardise solicitor’s compliance with their duties

27
Q

In which cases is Legal Aid available?

A

Debt and contract cases if a home is at immediate risk of sale or repossession, or if facing eviction. It is only available in personal injury for a limited range of clinical negligence cases.

28
Q

What is ‘legal help’ under Legal Aid?

A

Advice on the law and how to proceed which can be used for initial work to a set limit. The client must qualify financially and there must be sufficient benefit to justify the spending of public money.

29
Q

Which three ways are applications for legal representation for court proceedings in Legal Aid means tested?

A

Can it be dealt with by mediation etc. / Can it be funded another way / Is the spending of public money justified

30
Q

Under what Civil Procedure Rule are courts required to encourage parties to use ADR if appropriate?

A

CPR r1.4(2)(e)

31
Q

Explain how negotiation works

A

Parties or their lawyers discuss solutions face to face or in correspondence, usually without prejudice so that unsuccessful discussion’s subject matter is not revealed in subsequent litigation.

32
Q

What are the 5 advantages of negotiation?

A

Can be done at any point / parties can walk away at any time / avoids proceedings and trial / outcome is confidential and private / may preserve ongoing relations

33
Q

What are the 2 disadvantages of negotiation?

A

Possible solicitor and counsel costs in without prejudice meetings / unrealistic demands may hamper progress

34
Q

Explain how mediation works

A

Parties meet an independent mediator at a neutral venue, initially together to outline the dispute before splitting up. The mediator will then go between the parties and speak to each to try to reach a solution. If reached, the solution will be a written binding agreement.

35
Q

What are 7 advantages of mediaton?

A

Wider scope than courts as resolution in the parties’ choice / “win win” result preserves relationships / parties can walk away anytime / mediator is neutral / confidential process / quicker and cheaper than litigation / without prejudice

36
Q

What are 6 disadvantages of mediation?

A

Can be costly (hire of mediator is usually split between the parties) / parties must pay their own attendance costs / resolution isn’t guaranteed if the other party is not positive about mediation / unsuitable for a party wishing to set legal precedent / unsuitable if injunction needed / clients with a strong case will prefer court

37
Q

Explain how arbitration works

A

Arbitration clauses require parties to arbitrate rather than go to court. It is a substitute for litigation. Disputes are referred to independent arbitrators who are experts in the subject. Arbitration procedure is adopted but parties aren’t required to follow formal court procedure. Decisions are final and binding.

38
Q

What is judicial arbitration?

A

When parties seek a final binding decision, their dispute is referred to an expert specialist or arbitration panel hearing.

39
Q

What is contractual arbitration and what areas may it be common in?

A

When parties are contractually bound to use a particular arbitration process instead of pursuing litigation. It is common in shipping and construction and also holiday contracts.

40
Q

What are 5 advantages of arbitration?

A

No need for litigation / quicker than court / cheaper, especially if scheme is run by a trade body / decision made by expert 3rd party / private and confidential

41
Q

What are 4 disadvantages of arbitration?

A

Panel or expert can be costly / parties usually represented by lawyers, costing more / time consuming / limited rights of appeal

42
Q

Explain how conciliation works

A

The process is similar to mediation and negotiation with similar advantages and disadvantages. A neutral conciliator plays an active role in resolving the dispute rather than just facilitating discussions.

43
Q

What cases is conciliation usually used for?

A

Complex multi party disputes

44
Q

What is Early Neutral Evaluation (ENE)?

A

Where parties refer a dispute to a neutral expert to make a preliminary assessment on the merits of the case, with the aim of determining the outcome of the dispute should it go to trial. The expert hears evidence and discusses the case without prejudice with the parties before making a recommendation.

45
Q

What are 3 advantages of an ENE?

A

quick / confidential / helps parties reach reasoned settlement

46
Q

What is a disadvantage of ENE?

A

non-binding

47
Q

Why can correspondence between parties be relevant to the courts when making a costs order?

A

It can show is they were obstructive and did not co-operate with ADR

48
Q

What was recognised by the Court of Appeal in Halsey v Milton Keynes General NHS Trust [2004]?

A

Whilst it is not worth forcing ADR on an unwilling party, if unreasonably refused the court may penalise the offending party in costs, even if they win.

49
Q

What happens if a party fails to respond to an invitation to ADR and what should parties do instead?

A

The court may penalise them in costs even if they win. Parties should engage with the idea of ADR. They can turn it down if considered inappropriate but a minimum would be to respond in writing with their reasoning.

Unit 9 (9 decks)

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