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The availability of funding for civil disputes including conditional fee arrangements has been the subject of attention by the government in recent years and this in turn has led to considerable public debate. Maintaining the rule of law is one of the central roles of government and if some people are denied access to the courts and consequently denied access to justice, then the rule of law and respect for the rule of law is weakened. The public funding of legal advice and help in court is often referred to as legal aid. Parliament has legislated over this matter in recent years and this answer will focus upon the reforms and changes introduced by the Access to Justice Act 1999 and the Legal Aid, Sentencing and Punishment of Offenders Act 2012.
The question of availability of legal funding for legal cases in general may be misleading and it is helpful to to note that certain types of help are included. This may include Legal Help – advice on rights and options and help with negotiating and preparing the case; Help at Court – someone speaks on the person's behalf at court, but does not formally represent them; Family help and Mediation – helps individuals come to an agreement in a family dispute after a relationship has broken down without going to court. It can help to resolve problems involving children, money and the family home; Legal Representation – representation at court by a solicitor or barrister including representation at mental health tribunal proceedings or before the First-tier Tribunal in asylum or immigration cases.
So what is the nature of the help? The principle of accessibility is behind the general premise that everyone should have access to the courts and that no one should be denied that right on the grounds of inability to pay. It was Mr Justice Darling who once said: “The Law Courts are open to any man, so are the doors of the Ritz Hotel.” It is plain, however, that only the rich will enter those doors.
If you need help with paying for legal advice, you may be able to get legal funding or legal aid. It is probably fair to say that this availability is not straightforward. To help decide who qualifies for legal aid there are three things to consider. They are the scope of the case and whether it is one for which legal aid is available, the merits or the probability of success of the case and the person's financial eligibility or means to pay.
The fact that someone may feel that they have a grievance or valid case does not necessarily mean that they will be entitled to legal aid. Only specified matters are eligible for assistance. The cases for which you can get financial assistance include harassment, debt, housing, an inquest into the death of a member of your family and injunctions for gang-related violence and numerous other matters. It follows that because a number of matters are excluded this is important in the context of the overall availability of legal funding. Financial assistance is not available for every matter which may affect our lives and excluded matters include personal injury, wills, boundary disputes, defamation and divorce unless there is domestic violence.
The exclusion of personal injury follows the development of contingency fee arrangements as the government has endeavoured to shift the balance of legal funding from the public purse to other methods including the insurance sector. Boundary disputes are notoriously time consuming and expensive and difficult to find successful outcomes so many would agree that it makes sense to exclude these from legal funding.
Other excluded areas include small claims, and this is consistent with the policy of trying to make access to justice at this level a real possibility for low level claims where incurring legal costs are discouraged. The limit at present is £10,000 and this was increased from £5,000 in April 2013. Legal aid is also not available for either preparing for or appearing at tribunals unless the matter involves mental health issues.
What is perhaps more worrying are the recent reports that the number of applications for legal assistance received by the Bar Pro Bono Unit has practically doubled over the last three years since the cuts to civil legal aid mentioned previously were introduced. Such data and its impact raises concerns about the availability of legal aid and assistance and what this might mean in terms of unmet legal need. We should remember it was only earlier this year in July 2015, that the Court of Appeal increased Heather Ilott’s share of inheritance to £164,000 after she fell out with her mother, who left her entire estate to three animal charities. Heather's legal battle had lasted some 10 years.
There is a principle that one should not spend good money after bad and it makes sense that the merits test is based on the likelihood of success. The merits test also takes into account the amount of damages likely to be awarded and the conduct of the parties.
You will need to meet the financial conditions for getting legal aid and your financial eligibility or means to pay will be assessed. In some cases, legal aid is free. If you exceed the minimum means test you may have to pay a contribution towards the cost.
The means test uses the notion of disposable capital and disposable income. ‘Disposable income’ is the amount of income left from gross income after deductions have been made for things like national insurance, tax, maintenance, and housing costs. To qualify for legal aid a person's disposable income cannot be more than the limit set and if you qualify you do not have to pay anything towards the assistance provided. If the limit is exceeded and you are being helped with legal representation you will be expected to make a contribution. Furthermore you will not get legal aid if you have 'disposable capital' (savings) exceeding £8,000. Disposable capital includes money in the bank, valuable items and the net value of your home.
The present government's austerity measures, including cuts to the legal services budget, has highlighted the need to set limits and that there may be priorities. The legal aid fund is finite and the fund is decreasing on an annual basis. The fact that someone may have a case which has merit does not necessarily mean that they will receive funding as this is dependant upon there being any money left.
Conditional fee agreements (sometimes known as 'no win, no fee') were introduced in England and Wales by the Courts and Legal Services Act 1990 and are intended to help client's manage the cost of taking a case to court. Civil litigation is generally expensive, not least because of the cost of lawyer's fees, but also because of additional matters such as court fees. Under our legal system it is customary for the losing party to have to meet not only their own costs but those of the winning party, so the matter of costs can be a particularly important factor when deciding whether to litigate. Confident as you may be when you commence legal proceedings there will always be uncertainties, not least being over costs and the future direction of the case and how the other party will respond.
The basis of a conditional fee arrangement is that the solicitor and client agree on a fee for the case and this is based on a fee which would normally be charged. This would be agreed prior to the proceedings commencing so that it brings a degree of certainty and this is of obvious benefit to the client.
A success fee is agreed upon. A success fee can be up to 100% of the normal fee and is added to the normal fee if the case is won. The success fee is there to compensate the lawyer for the risk of not being paid. The success fee cannot however exceed 25% of any damages recovered under the case. Since 2013 this success fee can no longer be ordered to be paid by the losing party which again enables the litigant to better understand their liability for costs at the outset.
The solicitor will get nothing in the event that the case is unsuccessful. This eventuality may be covered by insurance. In most cases the uncertainty about whether a party will need to meet the cost of the other party if the case is lost will be covered by insurance. This is a significant characteristic of conditional fee arrangements.
Conditional fee arrangements are intended to provide access to justice in cases where it is felt that it is not appropriate to publicly fund the case through legal aid. Conditional fee arrangements were extended to all civil cases (excluding family) in 2000. Previously they had only been available for personal injury, human rights and insolvency cases. The government has imposed strict limits on the legal aid budget and, in addition, has ruled that some matters no longer qualify for legal aid. 'No win, no fee' arrangements are therefore seen as a means of enabling those individuals who believe they have a case with merit to proceed as some of the uncertainties about costs have been taken away. Prior to the extension of conditional fee arrangements middle income families complained that they did not qualify for legal aid as they exceeded the low levels of disposable income or capital. The extension to all civil work in 2000 was the government's way of closing this access to justice gap.
Since the use of these arrangements have been permitted there has been a considerable growth in the number of law firms that are prepared to operate under conditional fee arrangements. Many law firms specifically advertise for work, particularly personal injury work, on a 'no win, no fee' basis.
(Word Count 1644)
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