Funding Options for Legal Services

Question 1

Why is it important for solicitors to be alert to the different funding options for clients?

Answer 1

As solicitor has duty to act in client’s best interest which includes drawing attention to different funding options that may be available

Question 2

What should solicitors do to discharge obligation to act in best interest of clients in relation to funding options?

Answer 2

They should conduct reasonable and proportionate search to establish whether the client has any funding options available to them such as Before the Event insurance

Question 3

What is unbundled legal services way of charging a client?

Answer 3

Solicitor takes responsibility for a very specific task such a drafting a document rather than representing a client in a matter more generally

Question 4

When would it be normal for a client to fund legal work through their own private resources?

Answer 4

Individuals - residential conveyancing or preparing a Will

Businesses - normal way of funding vast majority/all of the legal work they need

Question 5

What is professional funding and when might it be available?

Answer 5

Where legal work is funded by a trade union or professional organisation

Available in principle for any type of work but most likely for civil or criminal litigation

Question 6

What is before the event insurance?

Answer 6

Insurance that is taken out before the need for legal work arises.

Insurance policy pays out to cover legal work in the event that it is needed.

Question 7

Are BTE insurance premiums recoverable from the other side should the policyholder be successful in the litigation?

Answer 7

No

Question 8

What are conditional fee arrangements?

Answer 8

No win, no fee agreement.

If case is successful then solicitor will be paid normal fee plus a success fee of up to 100% of the normal fee.

Question 9

Under conditional fee arrangements, can successful party recover success fee from opponent?

Answer 9

No so success fee will essentially come out of successful party’s damages

Question 10

How are success fees for conditional fee arrangements restricted for personal injury cases?

Answer 10

Cannot exceed 25% of damages, excluding damages for future care and loss

Question 11

What are the limitations of conditional fee arrangements from the client’s perspective?

Answer 11

It only funds the solicitor’s costs so does not cover expert’s fees, court fees or other disbursements.

Client will need to put in place separate funding for these.

Question 12

What are damages-based agreements?

Answer 12

Another no win no fee arrangement.

If case is successful, solicitor will be paid a proportion of the damages awarded to their client by way of remedy.

Question 13

What are the maximum percentages of damages available under damages-based agreements?

Answer 13

• 25% excluding damages for future care and loss in personal injury claims
• 35% of damages in employment tribunal cases
• 50% of damages in all other cases

Question 14

What is a limitation on damages-based agreements?

Answer 14

It only funds the solicitor’s costs so does not cover expert’s fees, court fees or other disbursements.

Client will need to put in place separate funding for these.

Question 15

What is after the event insurance?

Answer 15

Insurance policy taken out after need for legal advice has arisen.

Question 16

What is third party funding?

Answer 16

Litigation funding is provided by a third part to enable parties to bring their cases to court.

Such 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.

Question 17

What is community legal service funding?

Answer 17

Previously legal aid. Provision of public funds to assist in the procurement of legal services for those who could not otherwise afford it.

Question 18

What civil claims is CLS funding likely to be available for?

Answer 18

• children/family disputes
• homelessness
• domestic violence
• vast majority of civil legal work is not eligible fr CLS funding

Question 19

When will CLS funding not be available for a client even where their case is one that could potentially be funded?

Answer 19

• where their income is too high
• where they have too much capital
• where their case is insufficiently meritorious

Question 20

What are advice are all criminal suspects entitled to at the police station?

Answer 20

All suspects are entitled to free legal advice at the police station regardless of their means

Provided by the Defence Solicitor Call Centre but limited to telephone only for non-imprisonable offences

Question 21

What two tests must be passed for individual to receive legal aid funding in criminal cases?

Answer 21

• means test
• merits test

Question 22

When will individuals automatically pass the means test?

Answer 22

• defendants under 18 years of age and/or
• those on specified welfare benefits such as Universal Credit and income-based Jobseeker’s Allowance

Question 23

What is the initial assessment means test applied against for the magistrates court?

Answer 23

An applicant’s weighted gross annual income which includes that of their partners (unless the partner is the complainant, prosecution witness or co-dependent in conflict with the applicant)

Question 24

What are the relevant income thresholds for means test at the magistrates court?

Answer 24

• £12,475 - to be eligible for public funding
• £22,325 or more - to be ineligible for public funding
• in between those two figures means you take a full means test to establish applicant’s annual household disposable income - if £3,398 will be funded

Question 25

What happens if you fail the means test for the magistrates’ court?

Answer 25

Can apply for eligibility review or hardship review if they have unusually high outgoings or defence costs

Question 26

What is the means test at the Crown Court to be assessed against?

Answer 26

Income and capital, including any equity in properties owned by the applicant

Question 27

What amount of combined capital and equity allowance is available?

Answer 27

£30,000

Question 28

What are the thresholds for an applicant’s annual household disposable income

Answer 28

• £37,500 or more - ineligible for public funding
• £3,398 or less - eligible for public funding without contribution
• between two threshold - eligible for public funding with a contribution - 90% of disposable income for maximum of 6 months in instalments and subject to maximum based on the type of offence (refunded with interests if D is acquitted)

Question 29

What can D do if they fail the means test?

Answer 29

Can apply for eligibility review or hardship review if subject to contribution order and error or circumstances have changed

Question 30

What is the merits test?

Answer 30

Applicant must demonstrate that it is in the interests of justice for them to be legally represented.

This should be done with reference to the ten provisions so they can demonstrate that their matter is so serious or complicated that D could not conduct their own defence.

Question 31

When will D automatically pass the interests of justice test?

Answer 31

If they are charged with an indictable-only offence

or

an either way offence that is later sent to the Crown Court

Question 32

What are the ten propositions for the merits test?

Answer 32

a) I will lose my liberty

b) I have been given a sentence that is suspended or non-custodial. If I break this, the court may deal with me for the original offence

c) it is likely I will lose my livelihood

d) it is likely I will suffer serious damage to my reputation

e) a substantial question of law may be involved

f) I may not be able to understand the court proceedings or present my own case

g) witnesses may need to be traced or interviewed on my behalf

h) the proceedings may involve expert cross examination of a prosecution witness

i) it is in the interests of another person that I am represented

j) any other reasons

Question 33

What is of relevance to the merits test factor of I will lose my liberty?

Answer 33

Must be more than just the offence is imprisonable.

Must be real and practical chance that D will be imprisoned with reference to the sentencing guidelines

Question 34

What is of relevance to the merits test factor of I have been given a sentence that is suspended or non-custodial. If I break this, the court may deal with me for the original offence ?

Answer 34

Details of any suspended or non-custodial sentence need to be provided in this sentence

Question 35

What is of relevance to the merits test factor of it is likely I will lose my livelihood?

Answer 35

Requires representation to convey mitigation that will avoid a penalty interfering with employment.

Question 36

What is of relevance to the merits test factor of it is likely I will suffer serious damage to my reputation?

Answer 36

Is D a professional eg a school teacher?

What is the nature of the allegation eg sexual assault?

Question 37

What is of relevance to the merits test factor of a substantial question of law may be involved?

Answer 37

Must identify issue of law rather than fact.

Eg breach of PACE? Admissibility question? Case authorities to be relied upon?

Question 38

What is of relevance to the merits test factor of I may not be able to understand the court proceedings or present my own case?

Answer 38

• what language does D normally speak
• why is an interpreter not sufficient
• are there legal phrases or technical areas of law that D would not understand even if an interpreter is provided
• is D a youth
• does D suffer from learning difficulties or mental health issues

Question 39

What is of relevance to the merits test factor of witnesses may need to be traced or interviewed on my behalf?

Answer 39

Detail why solicitor needs to speak to witnesses and not D

Why does the witness need to be traced?

Is it a member of the public?

Consider providing the court with the kind of evidence that D is seeking to adduce via this witness

Question 40

What is of relevance to the merits test factor of the proceedings may involve expert cross examination of a prosecution witness?

Answer 40

Must demonstrate more than simply showing a lack of knowledge of proper court procedure.

Question 41

What is of relevance to the merits test factor of it is in the interests of another person that I am represented?

Answer 41

• consider whether the complainant/victim would feel uncomfortable if cross examined by D personally
• the victim is young
• interest must be of someone who is involved directly in court proceedings = D’s children do not count

Question 42

What happens if D fails merits test?

Answer 42

If fails in magistrates court can submit another application then appeal to crown court

Question 43

What happens if D is unable to access publicly funded legal representation and cannot afford to privately fund themselves either?

Answer 43

They may consult duty solicitor provided they are charged with imprisonable offence.

Duty solicitor can only represent them on one occasion.

D can represent themselves with assistance of the court.