Pooled legal fund to aid access to justice

Following the 'considerable change' in civil justice, legal professional bodies have joined forces to consider how best to fund litigation for those ineligible for legal aid and lack the means to pay for a lawyer.

The Law Society, Bar Council, and Chartered Institute of Legal Executives (CILEx) have launched a working group to examine the viability of a contingent legal aid fund (CLAF).

With the intention of facilitating access to justice, the recyclable, pooled fund would be financed by damages recovered in successful civil cases where the client was supported by the CLAF.

In theory, successful claimants would pay an agreed percentage of damages back to the fund in order to finance its continuation. The percentage would be less than that paid under a conditional fee agreement (CFA).

Today's announcement follows a speech from Sir Rupert Jackson in February in which he invited the professional bodies to consider setting up a joint working party to take forward the CLAF proposal.

'The success of third party funding illustrates just how well a CLAF might do,' said Jackson. 'If the Law Society, CILEx, and the Bar Council are willing jointly to promote the establishment of a CLAF, it would in effect operate as a not-for-profit third party funder.'

The working group, which is chaired by 4 New Square's Justin Fenwick QC, will make recommendations on CLAF's viability - including potential changes to legislation, the Civil Procedure Rules, and other forms of funding - by the end of the year.

The group will also investigate how to initially fund the pool, how it would operate, and its intended outcomes for consumers, lawyers, and the wider justice system.

With various CLAF models operating successfully in other jurisdictions - such as the supplementary legal aid scheme in Hong Kong, the South Australia litigation assistance fund, and the civil litigation assistance scheme in Western Australia - the concept has been discussed regularly for introduction in England and Wales.

The Bar Council first examined the possibility of alternative funding in civil justice in response to Lord Justice Jackson's Civil Litigation Costs Review in 2008.

A group, chaired by Guy Mansfield QC, produced two reports the following year that explored the possibilities for the concept of pooled funding of meritorious cases.

A CLAF was found to have a competitive advantage over CFAs due to the size of the potential pool and its independence.

However, due to dearth of relevant published quantitative data, a 2011 report recommended no further research into the fund be undertaken until the effects of the civil justice reforms became known.

'Since our last report on the subject in 2011, the civil justice landscape has changed considerably,' said chairman of the Bar, Chantal-Aimee Doerries QC.

'The Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) resulted in significant cuts in civil legal aid and in some cases the removal of public funding from entire areas of civil work.

'It is therefore timely to re-examine the feasibility of an independent, not-for-profit CLAF established by the legal profession, in the public interest, to promote access to justice.'

Before leaving Chancery Lane, Jonathan Smithers, the outgoing president of the Law Society, added: 'It is also important to consider any unintended consequences on existing funding options, which are presently working well for people.'

The president of CILEx, Martin Callan, said: 'As funding for civil litigation has changed, particularly following [LASPO], the renewed interest of the government and Judiciary is welcome.

'There is real opportunity to investigate if a CLAF could work in practice in England and Wales, and to identify the scope of its potential application, in the public interest.'

At its first meeting, members of the working group agreed to produce an initial report by September and a final report before the end of 2016.

John van der Luit-Drummond is deputy editor for Solicitors Journal john.vanderluit@solicitorsjournal.co.uk | @JvdLD