18 July 2016Print This Post

Profession presses ahead with CLAF investigation

Doerries: timely move

Doerries: timely move

The details of the joint working group set up to investigate the viability of a contingent legal aid fund (CLAF) at the urging of Lord Justice Jackson, have finally been published today – even though it has now already had two meetings.

The group is chaired by Justin Fenwick QC and has representatives of the Law Society, Bar Council and Chartered Institute of Legal Executives (CILEx).

For the purposes of the working group, a CLAF is defined as “a self-sustaining pooled fund to cover the legal costs of a claimant’s civil money claim, where (i) in cases that win, the claimant’s legal costs are recovered from the losing party and a portion of the damages or other sums recovered by the client is paid into the fund, and (ii) in cases that lose, the claimant’s appropriate legal costs are reimbursed by the fund”.

Last week Law Society chief executive Catherine Dixon said the group was seeking to identify “the most promising areas where a CLAF might have a role to play. If the group concludes that there are no areas that appear sufficiently promising, it will report accordingly.

“If areas are identified where a CLAF could have a useful role, the group will undertake further work to establish whether an economically viable model can be set up.”

A key issue the working party will have to address is where the initial funding could come from – in his speech in February, Lord Justice Jackson suggested it could come from the government, the National Lottery or ‘quasi-debentures’ bought by individual lawyers and/or institutions.

Bar Council chair Chantal-Aimee Doerries QC said: “The Bar Council has examined this as a possible alternative source of funding civil justice over many years. Our first report was published as long ago as 1998. Since our last report on the subject in 2011, the civil justice landscape has changed considerably.

“The Legal Aid, Sentencing and Punishment of Offenders Act 2012 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.”

Law Society president Robert Bourns agreed that a CLAF “could provide a valuable method to fund litigation and facilitate access to justice for those who lack the means to pay for legal services”.

He added: “We are keen to discuss ways to overcome the obstacles that prevented this idea from proceeding in the past. It is also important to consider any unintended consequences on existing funding options, which are presently working well for people.”

CILEx president Martin Callan noted that CLAF models “do operate successfully in other jurisdictions”.

The group plans to produce an initial report by the end of September and a final report before the end of the year.

Its terms of reference are:

  1. To investigate and report whether a CLAF could be viable in any area(s) of civil litigation and in particular as to whether it could be self-sustaining.
  2. To consider whether there are any gaps in civil litigation funding which could be filled appropriately with a CLAF.
  3. To consider whether a CLAF could provide a satisfactory means of civil litigation funding alongside, or as an alternative to, existing funding methods.
  4. To identify how a CLAF could be funded and what funding arrangements with lawyers, clients, insurers, funders or others would be necessary to make it viable.
  5. Against that background to set out the essential characteristics of a viable CLAF, including how it would operate and the outcomes it would deliver for clients, lawyers and the wider justice system.
  6. To make recommendations as to whether any and if so what changes would be needed to make a CLAF viable, in particular: (i) changes to other forms of funding (abolition or amendment); and (ii) legislative changes (primary or secondary legislation, including any changes to the Civil Procedure Rules).
  7. To make recommendations as to how a CLAF could be established (including its initial finance).
  8. To provide an initial feasibility report by September 2016 and a final report before the end of December 2016.

By Neil Rose


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