Explain what is meant by a conditional fee agreement and when it is used; and (ii) Describe the other ways of funding legal help and representation when bringing a civil claim.

Mrs Lindley

Law Essay

A) (i) Explain what is meant by a conditional fee agreement and when it is used; and (ii) Describe the other ways of funding legal help and representation when bringing a civil claim.

Introduction

Going to court can be a very expensive procedure, especially when the person in question has insufficient funds to cover all of the expenses. These include the solicitors cost and (in a situation that they lose the case) all of the opposing sides expenditures along with the fee they are being ordered to pay. This means that many people who have a strong and deserving case don’t follow it up because of the risk of losing and having to pay the other sides’ costs as well as their own. To help get rid of this problem the government developed conditional fee agreements. But not all legal problems require representation in court. Some situations can be settled outside of court, saving unnecessary hassle and expense. Other organisations and help centres have been set up to help people with legal advice and to give them general information. I will discuss these places in further detail later on in my essay.

Conditional Fee Agreements

In 1990 section 58 of the legal services act allowed conditional fee agreements to help people in situations I have previously mentioned, but only in cases of personal injury, insolvency and human rights. In 1998 conditional fee agreements were extended to cover all civil cases except family. Conditional fee agreements support a substantial part of the access to justice act of 1999 (which established a community legal service providing services such as general information and legal advice) which helps the governments strategy for funding civil cases. They are quite important as people who have been denied legal funding (for reasons I will go in to later) instead opt for conditional fee agreements. Under a conditional fee agreement the solicitor may agree to take on the case on a ‘no win no fee’ basis. If the client loses the case then they don’t have to pay the solicitors costs (but still have to pay the other sides costs). In the case that they win they not only have to pay their solicitors costs but also a ‘success fee’. The success fee is determined by how likely the outcome of the case will be. If the client is more likely to win than not the success fee will probably be rather low but if the outcome of the case is more difficult to envisage then the success fee may be more expensive. The success fee can be up to 100% of the agreed normal fee. However, there is a cap that the success fee cannot be more than 25% of the damages won by the client. As the success fee is seen as an extra fee it didn’t used to be possible to claim it back from the losing party, but the access to justice act 1999 allows the courts to order the losing party to pay the amount of the success fee. An interesting case to do with success fees is Callery v Gray. In this case the court of appeal rule that a 20% success fee was the maximum that the defendant would normally be ordered to pay in a straightforward personal injury case. They also said that if a case was settled at a very early stage the figure could be as low as 5%.

This is a preview of the whole essay

So because of this confusing ruling, new laws were laid out in June 2004. These laws stated that insurers of the defendant will have to pay 12.5% success fee if they win cases that settle of court however cases that go to trial can claim a 100% success fee. There is still a problem with the no win no fee cases. Yes the client won’t have to pay his or her own solicitor if they lose, but they will still have to pay the other side’s costs and expenditures. This is when insurance premiums are used. This is a protection against losing the case. The insurance has to be paid in advance of the case starting even if, in the end, the case is won. Insurance premiums are expensive and can be a problem for people who have little money. The expense of insurance premiums never used to be able to be claimed from the losing side, but because of section 29 of the access to justice act 1999 now they can be (if the judge orders it). Conditional fee agreements are used only in civil cases. They are normally used by people who cannot afford the expense of a solicitor but nobody is excluded (except if it’s a family case).

Other Organisations and Help Centres

As I have mentioned before, free advice can be obtained from a number of agencies. Some of them specialise in a particular are of law, others give general advice. The Legal Services Commission introduced the most prominent organisations. These are the Community Legal Service Fund and the Criminal Defence Service (I shall not go on to describe this, because the question does not ask me to do so). These were introduced in order to allow everyone access to Justice. The criminal defence service is concentrated on criminal cases whilst the Community Legal Service Fund is concentrated on civil cases.

The Community Legal Service and the Community Legal Service Fund

The community legal service is for matters concerning civil law. They provide such services as free legal advice, general information on the points of law, services of non-lawyers and also representation by lawyers. This service is funded by the Community Legal Services Fund. This fund is kept going by the legal services commission from money paid to the commission by the Lord Chancellor. The Lord Chancellor is responsible for determining the budget for each year. Unlike the old legal aid system, which didn’t have a set limit and provided funds for any case that qualified, the C.L.S.F does. This means that it is possible for people to be refused help (even with a deserving case) due to insufficient funds.

Cases That Are Excluded From Being Funded

Although they deal with many cases, the C.L.S.F can’t fund some types of civil legal matters. These are; defamation and malicious falsehood, cases to do with the running of a business, conveyancing, drawing up wills, matters to do with trust law and allegations of injury, death and damage done to property by negligence (though this is not funded by the C.L.S.F anymore, most people tend to get a conditional fee agreement as I have mentioned before. Clinical negligence is the one exception and can be funded by the C.L.S.F). They also do not fund people for claims less than £5000 or most tribunal hearings (except for cases in the mental health and immigration tribunals)

Priority for Funding

Section 6 of the Access to Justice Act 1999 says that the priorities for funding are decided by the Lord Chancellor. He gave priority for cases where; a person is in danger of losing their life or civil liberty, cases concerning the welfare of children, domestic violence cases, social welfare cases (though funding is not available for representation in employment or social security tribunals) and serious breaches of human rights by public bodies.

Funding Criteria

Before the person is granted legal aid, they must first prove that their case should be funded. To decide this, the following points are considered; if they don’t have too much disposable income or capital (persons who go over the maximum limit on their disposable income or capital are refused funding), if they do not have any other choice of legal services, if the case is likely to be successful or not and also if a prosecution would be in the public interest.

There is also a C.L.S website (www.clsdirect.org.uk), where people who need legal help can go online. It’s completely free and provides a wide range of access to many different kinds of people.

Citizens Advice Bureaux (C.A.Bx)

The Citizens Advice Bureaux was first set up in 1938. Today there are about 1,000 all across the country, mostly residing in towns. They give free general advice to anyone on a variety of legal issues, but mostly deal with problems connected with social welfare and debt, but they do give some legal advice. In most C.A.Bx’s a qualified solicitor or barrister comes in two- four times a week to give more detailed and specific legal advice. They also provide information on which solicitors live locally do legal aid and also cheap or free initial interviews (I will go on to this further later in my essay). C.A.Bx’s rely heavily on volunteers to keep them running, so most of the people that work there are unqualified in law, but they do offer a training program for the volunteers to become more knowledgeable in their area of work.

Claims Firms

These firms are commonly advertised on T.V and operate a kind of conditional fee agreement. They settle compensation cases on behalf of their client and if the case is not settled they arrange legal representation. Some of these firms are criticised because of the high insurance rates.

Law Centres

Law centres offer fee advice and sometimes representation for people. They are supposed to offer and friendly and unthreatening road for people who cant afford legal representation. The first one opened in 1970 in North Kensington and they have major funding issue, they are supposed to be funded by the local authority, but most are not willing to do so. However they do receive some funding from the Home Office and also the community legal service.

Cheap or Free Initial Interviews

Some solicitors offer this service and the Citizens Advice Bureaux will have a list of them. As the name suggests, they either conduct the interview for free or charge a discounted price (the maximum being £25)

b) Explain the criticisms that have been made of conditional fees and the other methods of funding. [15] (OCR).

The Problems with C.F.A

Although C.F.A’s are a great use to people who can’t afford a solicitor, they do have some faults that I will point out here.

One of the problems with CFA’s is that if a client has a particularly difficult case that is likely to lose, a solicitor isn’t likely to take the case on because if they lose he or she won’t get paid. This makes it a major problem for someone who has a tricky case and can’t afford a solicitor. Another is to do with the amount of work needed to be done, especially on personal injury cases, in such cases the solicitors could charge a 100% uplift fee. Then there are the insurance premiums. These are very expensive and the poorest clients cannot afford them. Also if a person was looking for a solicitor who deals in a specific area of law, they would be hard pressed to find one who does conditional fee agreements. Then there is the predicament that the client would be in if they lost. They would not have to pay their solicitor anything, but they would have to pay all of the other side’s costs and expenditure, including solicitors fee and success fee. If the client was to poor to take out an insurance policy before they lost the case they would be in deep trouble.

Problems with the Citizens Advice Bureaux (C.A.Bx)

The citizen’s advice bureaux are run mainly by volunteers and rely heavily on them to keep it going. This can be seen as a problem because the volunteers are not legally qualified and will not know as much as, say a barrister or solicitor. Also if it runs out of volunteers, it will close down.

Problems with Law Centres

Law centres are also run by volunteers. They severely lack funding and are in danger of being shut down. They are also very few and far between.

Conclusion.

In conclusion, even though there are some problems with the civil funding system, it is essential as it provides legal help to those who otherwise could not afford it. Yes it does need to be reformed slightly, but it has helped many people out in the past. The only major thing that I can suggest to be changed is the amount of funding that places like the law centres and C.A.Bx gets. I think that the amount that they gety now is appalling.