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Legal aid – but not as we knew it.

A guide to the new legal aid scheme for personal injury practitioners following LASPO.

 

Caroline Klage, Suzanne Trask & Jonathan Wheeler*

A guide to acronyms used in this article:

 

ATE        After the event insurance

AvMA   Action against Medical Accidents

BTE         Before the event insurance

CICA      Criminal Injuries Compensation Authority

CFA        Conditional Fee Agreement

ECHR     European Convention on Human Rights

FOIA      Freedom of Information Act 2000

LAA        Legal Aid Agency

LASPO   Legal Aid, Sentencing and Punishment of Offenders Act 2012

LSC         Legal Services Commission

QOCS    Qualified one-way costs shifting

 

Is legal aid really dead to us now, or are rumours of its demise exaggerated? This article aims to provide a practical analysis of the new civil legal aid scheme following the passing of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO).

Legal aid is theoretically available for the clients of personal injury lawyers, but mainly to those pursuing clinical negligence claims for children neurologically injured during birth and people pursuing compensation claims for abuse and assault. However eligibility has been narrowed, and this, combined with the abolition of the recoverability of CFA success fees and insurance premiums from defendants (save for the “recoverable” element of the premium for clinical negligence cases) could ultimately result in claimants with complex, high risk and disbursement heavy cases struggling to find a lawyer who is prepared to take on such cases, thus reducing access to justice.

The new scheme

The Legal Services Commission was abolished under LASPO[1] and in its place the Legal Aid Agency (LAA) was created as an Executive Agency of the Ministry of Justice. A new post was created for a Director of Legal Aid Casework, the office holder apparently being able to maintain an independence from the Lord Chancellor who issues guidance about the scheme.

The provisions of the Access to Justice Act 1999 relating to legal aid have been replaced by the relevant provisions of LASPO and the Funding Code is replaced by regulations made under the new Act which govern the merits criteria and procedures for funding cases. The new merits and procedural regulations apply to all cases where the legal aid application is made on or after the 1st April 2013.[2]

Which cases are still eligible for public funding?

The cases for which civil legal aid remains available are set out in full in the first schedule to LASPO. The schedule also sets out the many exclusions that apply.

Legal aid remains available in the broad civil categories of actions against the police or a public body, community care, some claims for clinical negligence, mental health, public law, claims relating to the protection of children and vulnerable adults, victims of domestic violence, some family proceedings, immigration, housing, and some other residual cases, along with cases brought under the new rules for exceptional funding.

As before, organisations which wish to offer legal aid must tender for a contract from the LAA and only those firms or organisations with a current contract in a particular category may undertake work in that category. In a number of categories, the number of legal aid funded cases a firm or organisation is permitted to take on is prescribed by a minimum and maximum number of ‘matter starts’ by the LAA.

Eligibility requirements 

Following the introduction of LASPO, the general eligibility requirements have changed for all cases.

The means test

As before, a claimant may be required to contribute towards the costs of their case by:

  • a contribution from capital, and/or
  • monthly contributions from disposable income and/or
  • repayment at the end of a successful case via the statutory charge for any costs not recovered on an inter partes basis. 

Capital passporting has been abolished, ensuring that all applicants are subject to the same capital test regardless of the statutory benefits that they receive.  Whilst this will result in an increase in the number of full means assessments that are required, this change actually removes an anomaly, as previously capital assessments were approached differently when applying for legal aid as opposed to when applying for other means-tested benefits.

Claimants on ‘passported’ benefits (Income Support, Income-based Job Seekers Allowance, Income-related Employment and Support Allowance, State Pension Credit Guarantee) were previously automatically deemed eligible for legal aid and were not means tested for income or capital when applying (as this would have been undertaken by Department for Work and Pensions). All other claimants were means tested for income and capital.

From 1st April 2013, applicants on the state benefits identified above who have more than £3,000 but not more than £8,000 in disposable capital are eligible but will need to pay a capital contribution towards their legal aid costs. This contribution could be all of their capital above £3,000, but may be less depending on the likely cost of funding the case. Where applicants on state benefits have more than £8,000 in disposable capital they are no longer financially eligible for civil legal aid.

Claimants with a monthly disposable income of £315 or less are not required to pay income contributions; this lower threshold is unchanged. However, for those claimants with incomes above this, the proportion of income required for the contribution will be moderately increased to 30% of disposable income.

The merits test and alternative funding methods

The Civil Legal Aid (Merits Criteria) Regulations 2013 have replaced the Funding Code merits criteria. As previously, the merits criteria come down to two broad issues –

  • The prospects of success of the case to be funded; and
  • The cost/benefit criteria – that is the likely damages to costs ratio, with proportionality requirements that vary according to prospects of success in any particular type of case. 

Perhaps by far the most significant change is that legal aid is likely to be refused where suitable alternative funding is available, such as a conditional fee agreement (CFA).[3]

An individual may qualify for legal representation only if the Director of the Legal Aid Agency is satisfied that:

  • the individual does not have access to other potential sources of funding (other than a CFA) from which it would be reasonable to fund the case;
  • the case is “unsuitable” for a CFA;
  • there is no person other than the individual, including a person who might benefit from the proceedings, who can reasonably be expected to bring the proceedings;
  • the individual has exhausted all reasonable alternatives to bringing proceedings including any complaints system, ombudsman scheme or other form of alternative dispute resolution;
  • there is a need for representation in all the circumstances of the case including—
    • the nature and complexity of the issues;
    • the existence of other proceedings; and
    • the interests of other parties to the proceedings; and
    • the proceedings are not likely to be allocated to the small claims track. 

The Lord Chancellor has issued guidance on this regulation and said that other sources of funding could include – 

  • insurance, where an individual‘s household or motor policy covers the (proposed) proceedings;
  • membership of a trade union which provides legal services to its members. The test is whether it would be reasonable to fund the case from the other potential source of funding, so that a refusal by the union to fund the case that appeared unreasonable would not allow the criterion to be met;
  • where another body, such as the Equalities and Human Rights Commission or special interest group might be expected to fund a particular case;
  • whether another person or persons who would benefit from a successful outcome should fund the case. [4] 

The Lord Chancellor’s guidance also defines what is meant by a CFA which is said to include damages based agreements and “litigation funding agreements.”[5]

The key issue is whether conducting the case on a CFA is “unsuitable” and the guidance states that:

“The test of suitability for a CFA is an objective one, rather than a question of whether an individual provider is willing to act under a CFA.”[6] 

In principle a case may be considered suitable for a Conditional Fee Agreement if:

  • Prospects of success are considered to be at least 60%;
  • The opponent is considered able to meet any costs and/or damage that might be awarded;
  • After-the-event (ATE) insurance can be obtained by the applicant. 

An applicant without ATE insurance seeking legal aid for a case otherwise considered suitable for a CFA will be expected to provide evidence of attempts to secure such insurance. Even where evidence is provided of refusals of insurance, the LAA may make enquiries of insurers to see if they would support a CFA in the individual circumstances; and just because the applicant cannot afford the premium, or defer its payment, will not necessarily be fatal to CFA suitability. Although the applicant may prefer legal aid funding because the potential deduction in damages would not be so great as with a post April 2013 CFA, this will not of itself prevent a case being suitable for a CFA.[7]

In deciding whether or not a case should be funded by a CFA, the LAA will also consider its own objective assessment of the applicant’s prospects of success at a final hearing (which may be an appeal). This is dealt with in the Merits Regulations, Part 1, Regulation 4 and the Lord Chancellor’s guidance. The LAA must not have regard to the possibility of settling the proceedings before hand. A “successful outcome” means the outcome a reasonable individual would intend to achieve in the proceedings in all the circumstances of the case.

The prospects of a case being resolved in advance of a contested trial should be taken into account only to the extent that the case may be finally concluded by the court or tribunal at an earlier stage. If, for example there is an argument that the opponent has a limitation defence, the danger of the case being defeated on this ground must be taken into account, whether or not the limitation issue is dealt with as a preliminary point or at the final hearing.

Prospects of success are defined in the Merits Regulations, Part 1, Regulation 5 as –

  • “very good”, which means a 80%+ chance of succeeding; 
  • “good”, which means a 60% – 79% chance of succeeding; 
  • moderate”, which means a 50% – 59% chance of succeeding; 
  • “borderline”, which means that the case is not “unclear” but that it is not possible, by reason of disputed law, fact or expert evidence, to decide that the chance of obtaining a successful outcome is 50% or more;[8]
  • “poor”, which means the individual is unlikely to obtain a successful outcome; or 
  • “unclear”, which means the Director cannot currently put the case into any of the other categories until investigations are carried out. 

What impact has LASPO had on clinical negligence claims? 

Clinical negligence claims now have specific eligibility criteria and fall outside the scope of legal aid except ‘where a child suffers a neurological injury resulting in them being severely disabled during pregnancy, child birth or the postnatal period (8 weeks)‘.[9]

This rather narrow definition means that sadly a number of severe cases involving children who are injured more than 8 weeks post child birth are not eligible for legal aid. Similarly complex cases involving adults who would previously have satisfied the means criteria will no longer be eligible. Such cases may involve life-changing brain or spinal injuries. On such complex cases, relatively high investigation costs have to be incurred before prospects of success can be determined.  Medical notes must be obtained and scrutinised and then a number of medical experts will need to consider and report on the issues of liability and causation. Where pre-LASPO legal aid may have been available to fund these vital initial investigation costs, the many claimants who fall outside the above eligibility criteria will now need to look to alternative forms of funding.

Claimants who benefit from union funding or pre-existing legal expenses insurance may be able to call upon the relevant union or legal expenses insurer to meet initial investigation costs. However, they will then be subject to the particular terms and conditions imposed by their union or legal expenses insurer. They are also likely to be restricted in terms of the solicitors they can instruct pre- issue of proceedings as unions may refer them to union-appointed solicitors and legal expenses insurers to their own panel firms.

Where union or legal expenses funding is not available, claimants will have to appeal to solicitors to fund their cases on conditional fee agreements. Whether there will be a strong enough appetite on the part of firms of solicitors to take on such cases when prospects are uncertain and the cost of funding investigations is so high is yet to be seen. Claimants able to fund their own disbursements will be in a stronger position, but claimants unable to afford such expense will have to look to their own solicitors to finance the case. It cannot be denied that funding such costs at the outset presents challenges to a firm’s cash flow and some firms may not wish to take on such cases, meaning that justice for deserving claimants with complex cases will be harder to access.  This will also impact on the freedom of claimants to instruct solicitors of their own choosing as they will be confined only to those firms able to fund disbursements at the outset. The situation is not helped by the fact that LASPO has abolished the recoverability of success fees from defendants. Indeed, it was historically these success fees which helped to fund unsuccessful or discontinued cases. The situation seems wholly unfair on many deserving claimants who may well now find themselves unable to pursue claims for life-changing injuries. In such cases, compensation provides claimants with the means to meet their very complex care, therapy and treatment needs and also helps them to avoid the financial hardship that can be experienced when serious injuries prevent claimants from returning to work.

Although after the event insurance is available for clinical negligence cases, post LASPO, the non-recoverable element of the insurance has to be funded by the claimant and therefore, taking out such insurance will effectively result in a claimant experiencing a shortfall in damages recovery upon the successful conclusion of the claim. Whilst, as the name would suggest, the recoverable element of the insurance can be recovered from the defendant if the claim is successful, such insurance may be of limited benefit in complex claims where indemnity for liability and causation reports is limited and may not be sufficient to cover the high costs incurred in obtaining the number of expert reports required to investigate and determine prospects of success. 

What has been the impact of LASPO on abuse claims?

Cases of intentional abuse to a child or vulnerable adult causing injury remain within the scope of legal aid funding,[10] as well as sexual offences causing injury to anyone.[11] Claims can also still be legally aided where it is alleged that there was an abuse of position or powers by a public authority[12] or where a public authority has breached the applicant’s human rights[13]. Cases for injunctive relief (but not compensation) brought under the Protection from Harassment Act 1997 are in scope[14] whilst applications to the CICA are excluded[15]; pre-LASPO they could have been brought under Legal Help.

It is perhaps early days to see if the system is truly working but anecdotal evidence appears to suggest that the LAA is rejecting or at least stalling on a high number of child abuse claims where they consider that they could and should be brought under a CFA. The LAA seems to be refusing applications where firms have not proved that they cannot obtain after the event insurance. With the decimation of the after the event insurance market (through LASPO) and the fact that claimants are protected by one- way costs shifting (QOCS) in any event, it is perhaps difficult to see the LAA’s rationale here. Note too the burden is on the applicant to show he/ she cannot obtain insurance. How many failed applications for insurance will it take to convince the LAA no one rightly knows. In the Government’s consultation on the future of legal aid which brought about the LASPO changes[16], the Ministry of Justice said this of claims arising from allegations of abuse and sexual assault:

In the light of the importance of the issue at stake, the seriousness of the alleged harm suffered by the litigant, the likelihood of their vulnerability and the lack of sufficient alternative forms of assistance to justify the withdrawal of legal aid, it is our view that the provision of legal aid funding is justified. We propose that it is retained for these claims”.[17]

Clearly the Government made a specific commitment to abuse survivors to retain legal aid for their cases. Whilst this has indeed been enshrined in the new legal aid scheme, the application of the guidance on refusing legal aid where objectively a CFA may be offered as an alternative, would appear to be reneging on that commitment by the back door.

It is the case that a great many child abuse cases have been and are being taken on a CFA basis – both before and after LASPO. Certainly prospects of success can be more accurately predicted where the abuser has been convicted and there is a decent vicarious liability claim against an institutional (and hopefully insured) employer. Legal inroads made by claimants in test cases on limitation[18], vicarious liability[19] and non-delegable duty of care[20]  are also of great assistance to the firm’s risk assessor. The LAA’s stance then would appear to be a self fulfilling prophecy of doom: It won’t fund cases which a solicitor somewhere might be prepared to take on a CFA. The LAA therefore will only fund those cases where prospects of success are less than ‘good’. Costs/ benefit concerns will cut into any lawyer’s ability to adequately prepare the case. The LAA will eventually end up having to fork out for the less than ideal cases taken on legal aid and be less likely to recover its outlay through an inter partes costs order or the statutory charge because the cases are more likely to fail or be abandoned.

The LAA also of course assumes that clients will pick up the tab for the hefty disbursements that may have to be incurred to prove the case, even though the client is of such low means that he would otherwise be eligible for legal aid, and therefore is unable to do so. Realistically it is of course the claimant’s solicitors that are expected to shoulder this financial burden but many of them may not be able to do so in these straitened times. The knock-on effect will be a reduction in a client’s choice of solicitor and quite likely limited access to justice for all but those with the most straight forward claims. The writers know of at least two firms which are considering a judicial review of the way the LAA is interpreting the guidance on the suitability of CFA’s in these cases.

One final point on child abuse claims: Under the new Jackson costs rules, claimants will potentially lose their QOCS protection if their claim is struck out for failing to have reasonable grounds for bringing an action.[21] Child abuse compensation litigation is a relatively new and fertile area of the law. Whilst in the main, limitation is not as big an issue as it once was, cases can still be struck out on their own facts if a limitation defence is taken. Further, often these cases may be pursued in good faith but in order to test the law at the very edge of vicarious liability or to establish a possible duty of care where perhaps one had not existed before. Such test cases are vulnerable to strike out applications. The risk-adverse insurance market may not provide protection. Legal aid must be available to allow such cases to be brought.

Exceptional funding

LASPO introduced a ‘human rights safety net’ with an expanded exceptional funding scheme to provide funding for exceptional cases where the failure to grant legal aid would result in an actual breach, or a risk of a breach, of an individual’s rights under the Human Rights Act 1998 or European Union law[22]. This would include the potential breach of an applicant’s rights to a fair trial under Article 6 (1) of the European Convention on Human Rights (ECHR). The Lord Chancellor has exhorted legal aid case workers to apply this within the context of a civil legal aid scheme that has refocused limited resources on the highest priority cases. He has stated that the threshold for such a breach of Article 6 is very high to overcome.[23]

Specific guidance is provided for cases of clinical negligence otherwise excluded from the legal aid scheme. The questions caseworkers must ask themselves are:

  • How complex is the case at hand bearing in mind the complexity and volume of any medical expert evidence and any medico-legal arguments in issue in the case?
  • How able is the applicant or litigation friend to present their own case? Their own medical problems and disabilities or caring responsibilities have to be borne in mind.
  • How important is the matter at stake? Is the applicant a disabled person who is seeking to recover damages which would, in whole or in part, cover adjustments, adaptations, equipment and care?[24]

 

Exceptional funding is not intended to be a category of funding in itself and is envisaged to be a ‘safety net’. It is difficult to see when this would be granted in the circumstances of a ‘standard’ clinical negligence claim: One can perhaps foresee a deserving case in circumstances where a vulnerable brain injured adult without legal capacity has a potential claim for compensation, which if successful would allow for a care regime to be established, and where objectively a CFA would not be offered because of uncertain prospects of success. However, it is not clear how likely it would be that such an application would succeed.

A recent article in the Law Gazette[25] commented upon the release of the report of the Low Commission on the future of advice and legal support[26]. The report follows a year-long investigation by cross-bencher Lord Low following LASPO. The report calls for urgent reform of the operation of the exceptional funding arrangements intended to act as a safety net for those not ordinarily eligible for legal aid, as it says that the current arrangements are ‘unwieldy and unworkable’. The commission found that advice lines to voluntary agencies such as Citizens Advice have been overwhelmed with people looking for legal advice. The Commission was established by the Legal Action Group in 2012.

Can legal aid be obtained for inquests? 

Whilst legal representation of families is becoming more common at inquests involving healthcare issues, this is largely because solicitors are increasingly willing to represent families on the basis that they will recover their costs in a subsequent clinical negligence claim, and will act on a CFA basis.

Exceptional funding applications can be made to the LAA for representation at inquests. In order to be granted, the Director has to make a wider public interest determination.[27]

The Lord Chancellor’s guidance[28] is that funding is not generally available because an inquest is a relatively informal inquisitorial process, rather than an adversarial one. An inquest is not a trial. There are no defendants, only interested persons, and witnesses are not expected to present legal arguments. An inquest cannot determine civil rights or obligations or criminal liability, so Article 6 ECHR is not engaged.

However under Article 2 of the ECHR there is a procedural obligation on the state to conduct an effective and proactive investigation into a death where the circumstances give rise to the possibility of a breach of the positive duty on the state to protect life. For exceptional funding to be granted there must be an arguable breach. The question to answer is whether providing legal aid to the next of kin is required for the state to discharge its procedural obligation to safeguard their interests and those of the wider public. This would apply to cases such as police shootings, deaths in custody or suicides whilst sectioned under the Mental Health Act 1983.

In the “ordinary course” of a negligently caused death it is thought unlikely that legal aid would be granted although evidence of possible systemic failures could give rise to a public interest determination such as the identification of dangerous practices, systematic failings or other findings that identify significant risks to the life, health or safety of other persons. This could apply within the context of deaths in a medical care setting and equally to the death of a child who was either in care, or should have been in care, were it not for the alleged negligence of a local authority’s social services department.

In the case of Humberstone[29] in 2010, the High Court quashed a decision of the Legal Services Commission (LSC) to deny a mother public funding for legal representation at her son’s inquest. As a result of the court’s decision, the LSC then agreed to recommend that Ms Humberstone received public funding. Mr Justice Hickinbottom’s comments are likely to have wider implications.

In Humberstone it was argued that legal representation is likely to be necessary to enable the Coroner to carry out an effective investigation into the death. The Judge also considered Article 2 of the ECHR. Many practitioners have assumed that the secondary duty of Article 2 is parasitic and only arises where the primary duty is engaged. However, the Judge in Humberstone said that an Article 2 inquest may be required “even where there is no reason to believe that state agents have failed to perform the primary duty imposed by Article 2” and that “any death in the care of any medical professionals triggers the secondary duty under Article 2”.

It was suggested that Ms Humberstone would probably have little grasp of the technical issues involved in the cause of her son’s death. She would therefore be in a vulnerable position, whilst the other interested parties – to include the ambulance service, hospital and GP – would all be legally represented, such that there would be an inequality of arms.

In his conclusion, the Judge recognised that the view of the Coroner was that an effective investigation could not be conducted unless Ms Humberstone was represented. Mr Justice Hickinbottom said that “putting the Coroner into a position where he can progress the inquest as soon as possible is of vital importance”.

Although peculiar to its own facts, this decision is likely to encourage more applications for public funding for families to be represented at inquests. Whether these applications will be granted remains to be seen, and so we may see more challenges to the refusal of funding in this area.

How many applications are made?

The Legal Action Group has conducted research indicating a huge drop in applications since 1st April 2013.[30] The charity is calling for a review of the exceptional funding mechanism, claiming that it is failing to provide a safety net as intended. The Legal Action Group’s research is based on the government’s estimates of the number of applications made and figures from the LAA.

Since LASPO came into force, 3,866 fewer people than predicted have received civil legal aid. The Legal Action Group partly attributes the decline to the smaller numbers of firms and agencies undertaking legal aid work and the more onerous hurdles which must be overcome before legal aid is granted. Many practitioners say they have had problems in identifying clients who are eligible for public funding due to the complexity of the rules.

A request made under the Freedom of Information Act 2000 (FOIA) to the Ministry of Justice in December 2013 revealed that between 1st April 2013 and 1st December 2013 there were 586 applications received for civil legal aid in the Clinical Negligence category of law[31]. Statistics published by the Legal Services Commission show that in the year between April 2012 to March 2013 3,853 applications for clinical negligence certificates were made, and 2,398 were granted[32]. This is a huge drop, reflecting the limited cases that remain eligible for public funding.

The FOIA request also showed that there were 198 applications for civil legal aid relating to historic child abuse reported under the Against the Police etc. category of law received between 1st April 2013 and 1st December 2013, and 301 made in the full year before 1st April 2013, so the number of applications in this category is broadly unchanged. The Ministry was unable to provide statistics as to how many of those applications were granted, nor was it able to identify those applications that related to historical child abuse that were made under the Personal Injury franchise category.

With regards to Exceptional Funding the FOIA request revealed that, as at 30 November 2013, 1,030 applications for exceptional funding had been received since 1st April 2013 and only 31 had been granted.[33]

Over recent years there has been a marked shift in the culture surrounding legal aid. The Legal Services Commission were increasingly pro-active in both identifying and sanctioning contract breaches such as a failure to comply with the financial limit on a certificate, with the ultimate sanction being the termination of a firm’s contract. The LAA is likely to continue this work. When one adds the reduced eligibility criteria for clinical negligence cases and the tightening of eligibility criteria across a number of other areas of civil law, this explains the fall of 30 per cent in civil legal aid providers since 2007/8.[34]

What are the pros and cons now of being able to offer legal aid?

The claimant’s perspective 

Legal aid remains an attractive funding option for successful claimants if the deductions from compensation to pay the non recoverable costs pursuant to the statutory charge are likely to be less than the corresponding deductions for the solicitor’s success fee, (and the non recoverable ATE insurance premium) on a CFA.  The claimant obtains protection from adverse costs orders under s26 LASPO although he will be subject to an order that the costs should not be enforced without leave of the court; there is therefore some uncertainty, should the claimant’s financial circumstances change.

There is no costs protection from failing to beat a Part 36 offer, which can be obtained (at a price) if the case is CFA funded with legal expense insurance.

A client may have to pay a monthly contribution from income or a capital contribution subject to their means, and may prefer the option of a CFA where no money is required ‘up front’. Due to the miserly rates allowed by the LAA with which to pay experts, a client may be put off from legal aid funding if he perceives that his cheaper experts will be less effective than his opponent’s.

The firm’s perspective

Simply having a legal aid contract to carry out a particular category of work is a valuable marketing tool for a firm and a visual demonstration of a commitment to social justice. It is often viewed as a badge of credibility, indicating that the firm has specialist solicitors practising in that particular category. Indeed, to be awarded a contract, the firm must have the requisite number of category supervisors who must fulfill specific requirements imposed by the LAA. For clinical negligence, a category supervisor must be either a member of the Law Society’s clinical negligence panel or the AvMA panel.

The ability to receive interim payments on a quarterly basis remains an attractive feature, particular for small firms covering only a small number of practice areas where cash flow and the funding of large disbursements over a long period of time may represent a financial challenge.

However liaising and negotiating with the LAA is tortuous and the costs associated with this will not be recoverable inter partes as a rule. Completing applications for funding and extensions, and waiting to hear back from the LAA with their decisions can increase the time within which the case can be concluded by months (maybe even years!)

As above, the restrictions on experts’ rates are problematic. In the complex and high value birth injury cases, solicitors will want to instruct leading and eminent experts and counsel to give their claimants the very best prospects of succeeding in their claims. There were new maximum rates for certain types of expert introduced from 1 April 2013 under the 2013 Remuneration Regulations. These also removed the London/non-London rate differentials for a number of the expert types. For example, the hourly rate allowed for either a neurology expert or GP expert in London is £90 per hour.[35] It is possible to apply for exceptional rates for experts but completion of the application forms is time consuming in itself and there is no guarantee of success.

Public funding certificates are subject to strict scope and funding limits. Exceeding either limit constitutes a breach of a firm’s legal aid contract and in extreme circumstances could potentially result in the contract being revoked. It may well be that in cases where the LAA are unwilling to increase scope or financial limits sufficiently, claimants will have to request that their funding certificates be discharged and investigate alternative funding options with their solicitors for the future stages of their case.

Advising eligible clients on funding 

Essentially, there is a need to perform a balancing act. Solicitors are under a duty to consider and alert their clients to all potential funding options and then advise as to which particular option is the most suitable for them. Naturally, the best interests of the client should always be at the forefront of our minds. It is important to bear in mind that if pre-existing legal expenses insurance (BTE) is available, then legal aid will not be offered. Therefore, it is vital that solicitors make the necessary enquiries with their clients and also ask them for copies of any relevant policies. If there is no available BTE then the solicitor will need to consider whether or not the claim is eligible for legal aid funding. If the claim is eligible, then considering the other funding options available, the solicitor must advise on which form of funding is in the client’s best interests. The most obvious alternative will be a CFA with or without ATE insurance.

Deductions from compensation will be likely either by way of the legal aid statutory charge or by way of the success fee under a CFA. Clear explanations must be given as to the effects of the funding arrangement on any award in a successful claim. It is currently unknown how the courts will approach potential statutory charge deductions from compensation awards in the case of legally aided children or protected parties. Arguably they should allow the deductions as it may not have been possible to get the claim off the ground without legal aid, and the costs of applying and liaising with the LAA are generally not recoverable inter partes. However the courts may naturally be cautious to do this where the compensation pays for crucial future care packages. Litigation friends will need to have certified that they will act in the claimant’s best interests and will step into the shoes of the claimant for the purposes of costs – will they face liability for deductions? The answers to such questions are currently uncertain.

Access to justice

There is no doubt that LASPO has limited access to justice for people bringing claims and will continue to do so. Cuts in pro bono legal provision and law centres will also put a heavy strain on remaining resources. Potentially, people are going to go without funding, and therefore without a solicitor, and chance their arm in the courts alone, often against wealthy institutional defendants. As the Jackson reforms bed-in, the courts are already stretched to their limit and the added burden of dealing with many more unrepresented litigants could well tip them over the edge. Happy days ahead then!

22nd January 2014


*The authors are partners with Bolt Burdon Kemp, London. Both Caroline and Suzanne specialise in clinical negligence work, whilst Jonathan deals with compensation claims arising from childhood abuse.

[1] LASPO section 38

[2] All cases funded by legal aid before 1st April 2013 will continue to be dealt with under the Access to Justice Act 1999.

[3] Civil Legal Aid (Merits Criteria) Regulations 2013, Part 4, regulation 39

[4] Lord Chancellor’s Guidance on Civil Legal Aid, April 2013, para 7.14

[5] Lord Chancellor’s Guidance on Civil Legal Aid, April 2013, para 7.16 quotes Regulation 2 of the Civil Legal Aid (Merits Criteria) Regulations 2013 as to how such funding agreements are defined

[6] Lord Chancellor’s Guidance on Civil Legal Aid, April 2013, para 7.17

[7] Lord Chancellor’s Guidance on Civil Legal Aid, April 2013, paras.7.17 to 17.20

[8] From 27th January 2014, new rules dictate that applications received on or after that date for full representation (as opposed to investigative help) will not be granted where cases are assessed as ‘borderline’. See http://www.justice.gov.uk/legal-aid/newslatest-updates/crime-news/reforms-on-crown-court-eligibility-and-borderline-merits

[9] LASPO Schedule 1 Part 1, para 23

[10] LASPO Schedule 1, Part 1, para 3

[11] LASPO Schedule 1, Part 1, para 39

[12] LASPO Schedule 1, Part 1, para 21

[13] LASPO Schedule 1, Part 1, para 22

[14] LASPO Schedule 1 Part 1, para 37

[15] LASPO Schedule 1, Part 2,  para 16

[16] Ministry of Justice consultation CP12/10 “Proposals for the Reform of Legal Aid in England and Wales” 10th November 2010

[17] Consultation CP12/ 10, para 4.58

[18] See A v Hoare and related appeals [2008] UKHL 6

[19] See for example Lister v Hesley Hall [2002] 1 AC 215; Maga v The Trustees of the Birmingham Archdiocese of the Roman Catholic Church [2010] EWCA Civ 256;  JGE v Trustees of the Portsmouth Roman Catholic Diocesan Trust [2012] EWCA Civ 938;  Various Claimants v Catholic Child Welfare Society [2013] 2 AC 1

[20] See Woodland v Essex County Council [2013] UKSC 66

[21] CPR 3.4(2) and CPR 44.15

[22] LASPO Part 1, section 10 (3)

[23] Lord Chancellor’s Exceptional Funding Guidance (non-inquests), April 2013, paras. 7and 10

[24] Lord Chancellor’s Exceptional Funding Guidance (non-inquests), April 2013, para. 46

[25] Law Gazette 13th January 2014

[26] Tackling the Advice Deficit, A strategy for access to advice and legal support on

social welfare law in England and Wales, The Low Commission, January 2014

[27] LASPO Part 1, section 10 (4)

[28] Lord Chancellor’s Exceptional Funding Guidance (inquests), April 2013

[29] The Queen on the Application of Claire Humberstone v Legal Services Commission [2010] EWHC 760 (Admin) decided 13th April 2010

[31] Freedom of Information Act 2000 request to Ministry of Justice, reference 87203, response from Information Governance at Legal Aid Agency dated 30th December 2013

[32] Legal Aid Statistics in England & Wales, Legal Services Commission 2012 – 2013 Ministry of Justice statistics bulletin published 25 June 2013, page 34 http://www.justice.gov.uk/downloads/publications/corporate-reports/lsc/legal-aid-stats-12-13.pdf

[33] Freedom of Information Act 2000 request to Ministry of Justice, reference 87203, response from Information Governance at Legal Aid Agency dated 30th December 2013

[34] Legal Aid Statistics in England & Wales, Legal Services Commission 2012 – 2013 Ministry of Justice statistics bulletin published 25 June 2013, page 34 http://www.justice.gov.uk/downloads/publications/corporate-reports/lsc/legal-aid-stats-12-13.pdf

[35]  The Civil (Legal Aid (Remuneration) Regulations, Schedule 5 http://www.legislation.gov.uk/uksi/2013/422/made

 

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