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SQE1 Professional Conduct > Funding of Legal Services > Flashcards

Funding of Legal Services Flashcards

1
Q

For certainty, what three things should be true of a retainer agreement?

A
  1. In writing
  2. Contain all relevant terms
  3. Signed by the client
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2
Q

What should a solicitor do before recommending a conditional fee arrangement or a damages based agreement, and why?

A

Ascertain whether the client can afford to pay privately (i.e. just pay his fees) as this may be more cost-effective for a client who can afford it

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3
Q

What should a solicitor do before recommending a conditional fee arrangement or a damages based agreement, and why?

A

Ascertain whether the client can afford to pay privately (i.e. just pay his fees) as this may be more cost-effective for a client who can afford it

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4
Q

What is the maximum % a solicitor can agree in a damages based agreement?

A
  1. 25% in personal injury
  2. 30% employment claims
  3. 50% in all other cases
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5
Q

Criminal cases in what court automatically satisfy the merits test?

A

Crown court

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6
Q

What is required to pass the merits test in a criminal context?

A

Applicant must show that it is in the interests of justice for them to receive funding

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7
Q

In a criminal legal aid context, might an applicant have to contribute to their fees?

A

Yes, depending on their income

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8
Q

In a criminal legal aid context, in what two situations is the financial eligibility (means) test not required?

A

Applicant is:

  1. Under 18, or
  2. In receipt of certain welfare benefits
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9
Q

What two tests must be satisfied to receive legal aid in a criminal context?

A
  1. Financial eligibility test
  2. Merits test (interests of justice test)
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10
Q

Can a civil legally aided party be forced to pay the other side’s costs?

A

No

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11
Q

In what circumstance could legal aid in a civil context be withdrawn?

A

If there is a change in the merits of the case

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12
Q

What three situations is civil legal aid available in and what two situations is it not?

A

Available:

  1. Housing disputes
  2. Family issues
  3. Debt issues

Not available:

  1. Contract claims
  2. Tort claims (except for birth defects in children)
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13
Q

What is required to pass the merits test in a civil context?

A

It must appear that the claim has a good prospect of success

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14
Q

What two tests must be satisfied to receive legal aid in a civil context?

A
  1. Financial eligibility test
  2. Merits test
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15
Q

What type of fee agreement is after the event insurance often associated with, and why?

A

Conditional fee agreements, because it protects you from the risk of having to pay your own disbursements and the other side’s legal costs if you lose

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16
Q

What is after the event insurance?

A

Insurance taken out after the event, through which disbursements are paid and usually also cover the risk of having to pay costs to the other side if you are unsuccessful

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17
Q

What is before the event insurance?

A

Insurance which covers the solicitor’s legal costs

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18
Q

What seven things must a damages based agreement specify?

A
  1. The proceedings to which the agreement relates
  2. Circumstances in which costs and expenses are payable
  3. Reason for setting payment at that particular level
  4. Expected disbursements
  5. The definition of success
  6. What happens in the event of adverse costs
  7. How parties can terminate the agreement
19
Q

What is the interplay between the solicitor’s % recovery in a damages based agreement and the costs paid by the losing side?

A

The % of the damages is worked out and any costs paid to the solicitor by the losing side are subtracted from the damages % for a net figure payable.

E.g. 10% of £500k award and £10k in costs already paid, means the solicitor receives £40k net.

20
Q

What must a solicitor inform a client of within the context of conditional fee agreements?

A

If they lose, whilst they won’t have to pay their solicitor anything, they may be liable for the other side’s costs

21
Q

In what category of proceedings can conditional fee agreements not be used?

A

Family and criminal proceedings

22
Q

What advice and updates must the solicitor provide on costs?

A

Clear and transparent advice, updating the client as the case progresses

23
Q

What the the key distinction between distinction between a CFA and a DBA?

A

in both cases, recovery of fee is both premised on their client winning the case, but for a CFA, the solicitor recovers a success fee (%) of their hourly rate, whereas in a DBA, they recover a percentage of the damages awarded.

24
Q

Do DBAs and CFAs extend to protect a party from liability in respect of their opponents costs?

A

No, which is why obtaining a form of legal expenses insurance is advisable.
- either-before-the-event (BTE) insurance or after-the-event insurance (ATE).

25
Q

What civil claims is after-the-event insurance (ATE) not available for?

A

Family proceedings

26
Q

What civil claims is legal aid available for?

A
  • family law proceedings where the client is the victim of domestic abuse;
  • Care proceeedings
  • Cases where client faces homelessness
  • Cases where client has been subjected to discrimination.
  • Immigration cases

Key point- legal aid is more limited for civil cases than crim.

27
Q

What is the applicable merit test for legal aid in civil proceedings?

A

for legal representation, client must have a prospect of success of more than 50%.
- if claim involved money, will consider amount of damages at stake.
- if claim does not involve money, will consider whether the benefits to be gained justify the costs of pursuing the claim. Applies the ‘reasonable client’ test, which considers whether someone would still pursue the case if they were privately funding it.

28
Q

What is the applicable means test for legal aid in civil proceedings?

A

client is only eligible if their capital or income is below £8,000 (or £3000 for immigration cases). income £35k or less - of more not eligible.
- also consider their partner’s income/capital.
- automatically satisfy test if in rceipt of welfare benefits (universal credit, income support).
- may still be required to contribute towards their legal fees.

29
Q

Is civil legal aid available for family disputes?

A

Yes

30
Q

What is the maximum cap on success fees on CFAs for personal injury claims?

A

25% of the damages rceovered at first instance - for P.I claims

(vs. 100% for all other cases)

31
Q

To be enforceable, what formalities must a DBA agreement comply with?

A

must be in writing and set up (1) claim to which agreement relates; (2) circumstances that payment is due; (3) reasons for setting out specifief amount.

32
Q

Is a receiptient of civil legal aid required to make any contributions for costs incurred?

A

depend on their financial situations, and if they receive damages, may be liable to repay some or all of the costs they receive.
- also be subject to a statutory charge if the receive any real property as a result of proceedings. Gives LAA a right to a charge over ie. home received.

33
Q

For criminal legal aid, in what circumstances might the income of a defendant’s spouse not be considered when determining whether they satisfy the means test ?

A

where the spouse has a contrary interest in the proceedings (ie. victim of the offence)

34
Q

How long does a client have to contest a solicitor’s bill of costs?

A

one month from date of receipt of bill

35
Q

What is the special expection regarding recoverable costs under a CFA for personal injury cases?

A

Success fee can be up to 100% of normal fees, but capped at 25% of damages.

36
Q

What does the client in a CFA pay if they win?

A

Pays out of pocket
- success fee
- short-fall in recovery from opponent.

Recovers from the other side
- Solicitor’s basic fee and disbursements
- Damages

37
Q

What does the client in a CFA pay if they lose?

A

disbursements to solicitor, but no costs to solicitor - it is a no win, no fee type agreement.

38
Q

In which type of work are CFAs prohibited?

A

criminal and family law

39
Q

When will an applicant fail the means test in the Crown Court?

A

household disposable income more than £37,500

40
Q

When will an applicant meet the means test in the Crown Court?

A

Eligible without any contribution
- household disposable income of £3,399 or less

Elibible with contribution - btw two.
- involves paying up to 90% of disposable income for six months in installment.

41
Q

What two source of finances will be looked at for the purpsoe of determining whether an applicant satisfies the means test in the Crown Court?

A

Income and capital

If total capital and equity (ie. value of any property applicant owns) allowance is £30,000 or more, then applicant may need to contribute in part to their defence costs.
- can come out of their income, instead of capital.

42
Q

When will an applicant for criminal legal aid in the Magistrate’s Court fail the initial means test?

A

where its income is £22,325 or more.

43
Q

When will an applicant for criminal legal aid in the Magistrate’s Court pass the initial means test?

A

if its weighted gross annual income is £12, 475 or less.

if it is above that, but still potentiall eligible (ie. note above £22k), then consider full means test.

44
Q

What does the full means test consist of in the context of criminal legal aid?

A

Looks at the annual household disposable income of the applicant.
- threshold to qualify is £3,338 or less.

SQE1 Professional Conduct (6 decks)

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