Unit 4 Funding of legal services

Question 1

The retainer

Answer 1

The contractual relationship which exists between solicitor and client.

Question 2

Professional conduct

Answer 2

Paragraph 8.7 - must provide clients with the best possible information about how their matter will be priced and, both at the time of engagement and when appropriate as their matter progresses.

Principle 7 - act in best interests of client.

Principle 5 - act with integrity.

Para 1.2. - solicitor must not abuse their position by taking unfair advantage of the client.

Paragraph 3.4 - consider and take into account the client’s attributes, needs and circumstances.

Question 3

Fixed fees

Answer 3

Complete the work for a fixed fee, or for a fixed fee plus VAT and disbursements.

Cannot be altered at a later date (unless the client agrees).

Question 4

Contentious and non-contentious business

Answer 4

Contentious business = work done in relation to proceedings.

Non- contentious business = not in relation to proceedings. E.g. conveyancing or commercial drafting work.

Question 5

Non- contentious business agreements

Answer 5

The solicitor may be remunerated by a gross sum, commission, a percentage, a salary or otherwise.

The agreement must:
(a) be in writing;
(b) be signed by the client;
(c) contain all the terms of the agreement (including whether disbursements and VAT are included in the agreed remuneration).

Question 6

Contentious business agreements

Answer 6

The agreement may provide for the solicitor to be remunerated by reference to a gross sum, an hourly rate, a salary or otherwise.

The agreement must:
(a) the agreement must state it is a contentious business agreement;
(b) the agreement must be in writing;
(c) the agreement must be signed by the client; and
(d) the agreement must contain all the terms.

Question 7

Funding civil litigation

Answer 7

Distinction must be drawn between solicitor and client costs (ie the fees that the client has agreed to pay to their own solicitor) and costs that may be awarded between the parties at the end of the case.

Question 8

Funding civil litigation - Variable fees

Answer 8

In certain circumstances, to charge a fee which varies according to the outcome of the matter.

2 types:
-conditional fee agreements
-damages- based agreements.

Question 9

Funding civil litigation - Variable fees - conditional fee agreements

Answer 9

Client pays a different amount for the legal services received depending on the outcome of the case.

If win then enhanced fee. Expressed as a percentage increase.
Cannot exceed 100% of the solicitor’s normal charges. In personal injury cases additional cap of 25% of the general damages recovered.

Question 10

Funding civil litigation - Variable fees - damages- based agreements

Answer 10

No win no fee.

Solicitor agrees to receive payment for their services only if the client is successful in their claim; and the amount of the solicitor’s fee is linked to the level of compensation/ damages obtained.

By percentage.

Cap - 50% of the damages.
Cap - in personal injury cases - 25%.
Employment cases - 35%.

If % is 50k and other side ordered to pay costs of 40k, client only pays 10k.

Question 11

Funding civil litigation - Legal expenses insurance - Before- the- event insurance (BTE)

Answer 11

Policy may exclude or limit certain costs. Insurer may not accept the claim if bad chance of success.

Question 12

Funding civil litigation - Legal expenses insurance - After- the- event insurance (ATE)

Answer 12

Taken out after the dispute has arisen.

Usually only covers liability for disbursements and the opponent’s costs.

Question 13

Funding civil litigation - Third party funding

Answer 13

Also known as ‘litigation funding’.

Where someone, with no other connection to the case, agrees to fund the costs of litigation. e.g. trade union or professional organisation.

Often for a fee at end of case.

Question 14

Legal aid

Answer 14

To carry out legal aid work, firm must have a contract with the legal aid agency.

Do not have to act for clients under the scheme.

Additional duties if do act - inform court of client using legal aid, inform legal aid agency if client acts unreasonably.

Claim costs from agency at end of case.

Question 15

Civil legal aid

Answer 15

e.g. for immigration and family cases.

With controlled work it is for the solicitor to determine the client’s eligibility, whereas licensed work is authorised by the Legal Aid Agency on a case by case basis.

Question 16

Civil legal aid - types

Answer 16

• Legal help
  Controlled work e.g. drafting letters. Does not extend to court proceedings.
• Help at court
  Controlled work.
  Covers advice and assistance, including advocacy.
  Work must be in relation to a hearing, not a case generally.
• Legal Representation
  Licensed work.
  Covers the conduct of the client’s case, if necessary, up to and including representation before the court.
  Can be granted on an investigative or full basis.

Available on an emergency basis e.g. homelessness, domestic abuse.

Question 17

Civil legal aid - The scope of legal aid

Answer 17

Not available for large areas of legal work. E.g. most negligence claims for personal injury, divorce and family disputes about children are excluded.

Not available for matters arising out of the carrying on of a business.

Even if a case falls outside the scope of legal aid, it may still be possible to obtain funding if the circumstances are ‘exceptional’ e.g. breach HRs.

Question 18

Civil legal aid - Merits test

Answer 18

Legal Help and Help at Court are subject to the ‘sufficient benefit test’ (to client).

Legal Representation is dependant of the client’s prospects of success.

Will be refused if other funding is available to the client (for example legal expense insurance) or if the case is suitable for a Conditional Fee Arrangement.

Question 19

Civil legal aid - Means test

Answer 19

Clients capital limit for civil legal aid is £8,000 (£3,000 for immigration cases).
If below this then look at income (below).

For other clients - if the client’s gross monthly income exceeds £2,657 the client does not qualify.
If less then deductions made to get disposable income.
Will only qualify for legal aid if their monthly disposable income is less than £733.

If get benefits then automatically qualify (under income still look at capital).

May contribute to legal fees.

Question 20

Civil legal aid - The statutory charge

Answer 20

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

Question 21

Criminal legal aid

Answer 21

Anyone attending at the police station is entitled to free legal advice.

Some solicitors are members of the duty solicitor scheme. A duty solicitor will be on a rota to attend a magistrates’ court.

Must make an application for criminal legal aid - there are tests.

Question 22

Criminal legal aid - interests of justice test

Answer 22

Factors:
a) be likely to lose their liberty or livelihood or suffer serious damage to their reputation;
(b) may involve consideration of a substantial question of law;
(c) unable to understand the proceedings or to state their own case;
(d) involve the tracing, interviewing or expert cross- examination of witnesses on behalf of the individual; and
(e) whether it is in the interests of another person that the individual be represented.

The test is automatically met if the client is under 18 years of age or the case is in the crown court.

Question 23

Criminal legal aid - means test

Answer 23

Clients who are under 18 or who receive one of a number of welfare benefits are entitled to criminal legal aid without needing to satisfy the means test.

All other clients will need to submit full details of their financial circumstances.

Taking the client’s gross annual income and dividing it by a set figure according to whether the client has a partner and/ or children.

From that figure decide if eligible or not, or if in the middle then full means test.