10.5: Funding options for legal services Flashcards
(26 cards)
What are damages-based agreements?
The legal team is paid a pre-agreed percentage of damages if the case is successful.
What is a conditional fee agreement?
Fees are only payable under certain conditions, usually only if the client wins the case.
What is the cap for damages-based agreements in litigation cases?
50%, inclusive of VAT and counsel’s fees.
What is the cap for employment tribunal cases under damages-based agreements?
35%, inclusive of VAT but excluding counsel’s fees.
What is the cap for personal injury cases under damages-based agreements?
25%, inclusive of VAT and applies only to damages excluding future pecuniary loss.
What is third-party funding?
A third party pays for the case costs in return for a percentage of the damages won.
Who administers legal aid in the UK?
The Legal Aid Agency.
What law significantly reduced legal aid availability?
Legal Aid, Sentencing and Punishment of Offenders Act 2012.
What are the three tests for legal aid eligibility?
Means test, merits test, and interest of justice test.
Who automatically qualifies for legal aid regarding certain benefits?
Those receiving Universal Credit, Income Support, Income-based Jobseeker’s Allowance, income-based Employment and Support Allowance, or state pension Guarantee Credit.
Which civil cases automatically qualify for legal aid?
Mental health tribunals, children in care, and child abduction cases.
Does the interest of justice test apply to civil cases?
Generally, no.
What tests apply to criminal cases for legal aid eligibility?
Means test, merits test, and interest of justice test.
Who automatically passes the interest of justice test in criminal cases?
Applicants under 18 years of age.
What is legal expenses insurance?
Insurance that covers legal costs related to disputes involving personal injury, property, employment, and goods/services contracts.
When can legal expenses insurance be purchased?
Before the event (BTE) or after the event (ATE).
What are common exclusions under legal expenses insurance?
Pre-existing issues, costs incurred before acceptance, claims with less than 51% success chance, and specific exclusions in policy terms.
If an insurer thinks at anytime the case might lose, they can cancel the policy.
What is a common complaint about legal expenses insurance?
Insurers often appoint solicitors from their own panel rather than allowing policyholders to choose freely.
What percentage of success does BTE insurance require
51% chance of success
What is Before the Event (BTE) Insurance
Insurance purchased before any legal dispute has arisen.
Provides cover for cases which happen in the future.
Covers: Legal fees for common issues like:
Personal injury
Employment disputes (e.g., unfair dismissal)
Property or neighbour disputes
Contract issues (e.g., faulty goods)
Key limitations:
Usually you cannot choose your own solicitor until proceedings start.
May exclude specific disputes (e.g., family or divorce cases).
Often requires the case to have at least a 51% chance of success.
Won’t cover pre-existing disputes (known about before the policy started).
After the Event (ATE) Insurance
What it is:
Insurance purchased after a legal dispute has already begun.
Commonly used in litigation or personal injury cases.
What are the key limitations of after the event insurance?
Expensive, especially in high-value claims.
Only available if your case has good prospects (usually 60–70%).
If your claim fails and you weren’t honest or upfront, the insurer may refuse to pay.
In civil legal aid, which tests apply?
Means and Merits tests mainly; Interest of Justice generally not needed.
In criminal legal aid, which tests apply?
Means, Merits, and Interest of Justice tests — all apply.
