Public Funding
Up to the year 2000 public funding was more widely available for civil litigation through the Legal Aid Scheme. The conditional fee agreement and the Civil Procedures rules were intended to reform litigation, so as to make it more accessible. In this context legal aid was focused on certain narrower areas which were perceived to be priorities and accordingly legal aid now has a limited role only in civil claims.
The civil litigation scheme is now run by the Community Legal Services which operate the community legal services funds. Funding is available in limited circumstances only. The party in receipt of funding may still be obliged to make a contribution towards costs from his disposable capital or income. This may be made payable on a monthly basis. Where a publically funded litigant recovers money, he may have to repay some or all of the community legal services.
Funding is not available for personal injury, claims for negligence for personal injury or damage to property except in very limited circumstances. In practice this would exclude the vast majority of accident and work related claims even where the claimant was resident in England and fulfilled the income and capital tests.
Conditional Fee Agreements
A radical innovation in England and Wales which took effect in the early 1990’s and has been further enhanced since then, are so called “conditional fee agreements”. Equivalent agreements are not legally possible in Ireland. This can be either a “no win no fee” basis on a no win lesser fee basis, a win and pay usual fees or a win and pay increased fees basis. The fee payable is based on the solicitor’s usual hourly charging rate and the fee payable on success is a percentage increase on those charges up to a maximum of 100%.
A conditional fee agreement does not involve the solicitor obtaining a percentage of money recovered. The basis behind conditional fee agreements is that the solicitor takes financial risks in relation to the litigation
There are specific rules on conditional fee agreements. They may be entered in relation to any private litigation matter i.e. any litigation between private parties; they must be in writing and they must contain certain mandatory details.
The agreements must set out under what circumstances the legal representative’s fees and expenses are payable or if partly payable, what proportion is payable. The basis of calculation of the fees and the amounts payable are to be stated. The method of calculation and in particular, any method linked to the level of damages, must to be set out.
Where there is to be a success fee, the agreement must state the reasons and set out the percentage increase in the usual fees. The success fee in a conditional fee agreement must be reasonable and if the Court disallows it, it will not be recoverable from the client.
A so called “simple” conditional fee agreement is one where the client is only to be liable to pay the legal representative’s fees and expenses to the extent that they are recovered in the proceedings, except in circumstances where the client has failed to co-operate or is otherwise at fault. The procedures and terms of the simple conditional fee agreement are less elaborate.
The basis upon which the conditional fee agreement work is the success fee by which where it is agreed the solicitor receives an increase on normal fees up to a maximum of 100%. If the client wins and the opponent is ordered to pay the costs, these may include the success fees. However, it will only be payable to the extent that the Court decides that it is reasonable. Where it is partly disallowed, the solicitor is not allowed to recover it from his client.
If a claimant loses in a case where there is a conditional fee agreement, he will not usually have to pay his own solicitor’s fees but is likely to be liable for his opponent’s costs. It is possible to purchase “after the event insurance” to cover the other side’s costs and disbursements in the event of losing. The premium will depend on the strength of the case. There is an obligation on the solicitor to discuss this insurance.
Where there is a conditional fee agreement or insurance cover has been obtained this must be notified to the other side at the outset. Certain details of the arrangement must be filed with the Court.
Contingency fee calculated on the percentage of an award is generally prohibited except in the context of a conditional fee agreement.
Information on Costs
A solicitor acting in litigation matters in England and Wales is obliged to give the best information available on the likely costs. It will not always be possible to give a completely accurate assessment of cost at the outset. However, the basis of costs can usually be calculated and an estimate given. Generally if a party loses litigation, he must pay his own solicitor’s costs and pay his opponent’s costs. The opponent’s costs will not necessarily be all costs incurred. Unless the parties agree on the level of costs, they will ultimately be fixed by a Court office, as is the case in Ireland.
A solicitor must give certain mandatory disclosures to clients before entering a conditional fee agreement. They must specify the circumstances in which the client may be liable to pay costs, the client’s right to refer assessment of fees to the Court Office and must advise of other methods of finance and if appropriate recommend insurance against costs. A conditional fee agreement must be signed by the client and solicitor.
