Legal Services - Funding of Legal Services Flashcards
Profit Costs
Fee for solicitor’s time - normally an hourly fee
Disbursements
Expenses incurred on client’s behalf - e.g. court fee, counsel fees
Funding of non-litigation matters
Private funding/private retainer. Client pays for costs and disbursements usually on a monthly basis
OR
Fixed fee
Conditional Fee Agreement ‘No win no fee’
Written agreement between solicitor and client - if client wins they will pay standard fee and success fee. Success fee is an agreed-upon percentage of the solicitor’s normal fee.
Success fee is limited to 100% of normal fees charged.
If they lose then they will not pay anything other than disbursements (unless they are liable for other side’s costs).
Win also includes a case being settled in your favour.
Damages Based Agreement
‘Contingency fee agreement’. If solicitor wins case their fee is taken out of the damages awarded (percentage can’t be more than 50% or 25% in personal injury cases of damages award)
Any costs the other side is ordered to pay is deducted from what the client owes their solicitor
If unsuccessful client pays solicitor’s disbursements
Third party funding
Third party agrees to finance all or part of legal costs in return for fee taken out of damages awarded. Other side’s costs not covered.
If client loses they do not have to pay their solicitor’s fees and disbursements. Third party bears the costs.
Legal Expenses Insurance
Before the event insurance: cover for legal costs in event client becomes involved in litigation. Usually require the use of a designated solicitor.
After the event insurance: policy taken out to cover legal costs after an event involving litigation has occurred. Solicitor’s fees are NOT included but other side’s costs and disbursements are
Union Funding
Similar to before the event insurance
Public Funding
Legal aid. Only in civil and criminal contexts
Civil legal aid
Restricted to housing disputes, family issues and debt issues.
Two tests: client must satisfy financial eligibility test and claim must pass a merits test. If test is met costs and disbursements are met but client may have to pay some contribution.
Criminal legal aid
Means test and merits test.
Means test not needed if under 18 or on welfare benefits.
Merits test: in the interests of justice to give public funding. More serious cases heard in Crown Court will meet merits test.
Professional obligations
Explain nature of funding arrangements, explain other options available (e.g. before the event insurance) and refrain from favouring own interest
