CH1. Funding

Question 1

Name 3 funding mechanisms that aid in the costs of litigation.

Answer 1

Legal aid funding; insurance, and; no win no fee agreements, comprising Conditional Fee Agreements (‘CFA’) and Damages Based Agreements (‘DBA’).

Question 2

Chapter 1 of the SRA Code of Conduct 2011 (the ‘Code’) requires a solicitor to…

Answer 2

Give his/her client information about costs and methods of funding.

Question 3

Outcome 1.13: a solicitor is duty-bound to advise on costs and methods of funding.

Answer 3

Clients should be given information about costs at the outset of a claim and, when appropriate, as the matter progresses: O(1.13).

Question 4

Name 3 main types of work excluded from legal aid.

Answer 4

1. allegations of personal injury or death, other than allegations relating to clinical negligence in cases of severely disabled infants or where there is significant public interest involved;
2. conveyancing; boundary disputes; the making of wills; matters of trust law; defamation (libel and slander) or malicious falsehood; matters of company or partnership law; and other matters arising out of the carrying on of a business (including contract claims);
3. employment cases; breach of statutory duty; negligence; consumer cases; and, education cases.

Question 5

Name 7 types of claims covered by legal aid.

Answer 5

1. housing matters where a home is at immediate risk,
2. judicial review,
3. certain family proceedings,
4. clinical negligence claims relating to birth injuries,
5. claims against public authorities,
6. mental health and 7. immigration.

Question 6

What does the ‘Legal help’ scheme cover?

Answer 6

Legal help is aimed at providing initial advice and assistance in preparing a case for court. This may include letter writing, telephone calls, getting a barrister’s opinion, but it will not cover issuing or conducting proceedings or providing advocacy services.

Question 7

What does the ‘Help at Court’ scheme cover? and What does a client need to evidence to qualify?

Answer 7

Help at court allows solicitors to speak on the client’s behalf at certain one-off court hearings.

In order to qualify for help at court the client needs to satisfy certain financial conditions and be able to show that having someone to speak on their behalf is reasonable, cost-effective and likely to be of real benefit to them.

Question 8

What does the ‘Legal Representation’ scheme cover? And what are the two forms of help available?

Answer 8

Legal representation is designed to allow clients to be represented in court when they are being sued or taking their own proceedings against another party. It covers preparation for, and advocacy at, a final hearing in contested proceedings.
The two types of help are; investigative help, and full representation.

Question 9

Investigative help is given where;

Answer 9

The prospect of success of the claim is unclear and the investigation required is likely to be expensive.

Question 10

Full representation help is given for;

Answer 10

All work to trial and beyond and the funding certificate will limit the terms of work and amount of costs that the solicitor can incur.

Question 11

Who qualifies for legal aid and how is it assessed?

Answer 11

only available to individuals. Partners (in a business partnership) may be included, as they are individuals, assuming of course that the category of work is not excluded.

Assessed on a 2-part merit and means test.

1. Is legal aid is appropriate in the circumstances of the particular claim? (Does the claim have sufficient merit?)
2. Does the client have sufficiently low means to warrant assistance?

Question 12

Factors considered in the Merits test.

Answer 12

• The prospects of success of the case.
• the likely costs that will be incurred to dispose of the claim and, where possible,
• the likely amount that will be recovered by the client.
• is any alternative funding available;
• is the claim suitable for the small claims track;
• is there any alternative to litigation ( I.e. complaints procedure);
• is it unreasonable to fund the case from ‘the public purse’.

Question 13

Requirements to satisfy the Means test.

Answer 13

• client must be ‘financially eligible’ (e.g. receiving certain types of benefit like income support)
  or
  the clients capital and income must satisfy the means test.

Question 14

Capital requirements for the Means Test

Answer 14

• the client’s disposable capital must not exceed £8,000. This disposable capital includes money in the bank, valuable items and any equity in property owned by the client.

Question 15

Income requirements for the Means Test

Answer 15

In order to qualify for legal aid, the client’s disposable income must not exceed £733 per month.

Question 16

Costs consequences of legal aid funding under the ‘statutory charge’

Answer 16

If a client keeps or gains money or property at the end of a case, then they may have to repay some or all of the legal aid costs to the LAA. The charge is made by law on the money or property concerned: s. 25 LASPO 2012.

Question 17

Legal Aid statute and agency

Answer 17

The Legal Aid, Sentencing and Punishment of Offenders Act 2012 (‘LASPO 2012’) effective from 1 April 2013,

the Legal Aid Agency (‘LAA’)

Question 18

What are the two types of no win no fee agreements?

Answer 18

Conditional fee agreements (‘CFAs’) and damages based agreements (‘DBAs’).