Conditional Fee Agreements v Legal Aid – Which Way to Turn Now?

November 22, 2010

Posted by:Sarmad Gassoub

With the public funding of medical negligence claims looking increasingly precarious in the light of the government’s new proposals for legal aid, specialists in the field and their clients are increasingly having to look elsewhere for the best way to fund a claim. Paying a solicitor on a privately funded basis is not a practical means forward for any but the most wealthy of patient victims and in the absence of some sort of pre-existing insurance arrangement, that just leaves Conditional ‘no win no fee’ Agreements (CFA’s) as the remaining funding option for the vast majority of people with such claims.

Although this might seem to be a less favourable funding option to the client, this in fact as a common misconception of how CFA’s, and for that matter Legal Aid, works.

Obviously depending on the wording, Conditional Fee Agreements can offer clients a number of advantages over public funding.

Public Funding of claim has the following key disadvantages which are not shared by CFA’s.

  1. Legal Aid Application Process – It takes a lot of time and effort to apply for public funding on behalf of a client. This can delay progress of the claim and a change in financial circumstances for the better can render a client suddenly ineligible, meaning that alternative funding options have to be found. Financial contributions are still expected from clients that earn a certain amount of money over a very a modest threshold.
  2. Costs Protection – It is myth that legally aided clients are exempt from having to pay costs. In fact adverse costs orders (during unsuccessful applications for example) can be enforced against the assisted person’s final award. Furthermore, the Defendant is entitled to postpone the final determination of an assisted person’s liability for up to 6 years which can leave a successful Claimant facing huge amount of uncertainty for an awfully long period of time;
  3. Statutory Charge – The Legal Services Commission are entitled to recover costs not recovered from the Defendants from the assisted person’s damages at the end of the case. This can be a particularly live issue where the claim involves only a partial recovery of compensation or where the claim has been made against multiple Defendants unnecessarily or where a Claimant fails to beat a Defendant Part 36 Offer at trial.
  4. Constraints on Public Funding – Public funding can be and is limited by the Legal Services Commission in all sorts of ways. The scope of the Certificate, the costs limit of the Certificate, and the number of experts that can be instructed for example. In any event, the maximum level of costs exposure that the Legal Services Commission will allow for any one case is £193,000. Although this is quite a high level of cover, it won’t always be sufficient in every maximum value catastrophic injury claim.

Conditional Fee Agreements offer advantages when looked against all four problem areas named above. They have already become the natural successor to personal injury claims over the last 10 years and now the same appears to be happening to claims for clinical negligence too (at least until the changes to the Civil Justice System proposed by Lord Jackson remove yet another Claimant funding option and replace it with something far, far less favourable to the innocent victim).