A Bar Council working group has been set up to explore the viability of a Contingency Legal Aid Fund (CLAF) in the wake of the government’s announcement on civil litigation costs.
In March, Justice Secretary Ken Clarke confirmed the government would implement Lord Justice Jackson’s proposals on civil litigation costs, under which the current “no win, no fee” regime will be replaced by contingency fees.
The fund would be used to finance deserving cases that would otherwise not be brought due to lack of money. A proportion of the winnings of successful cases are paid back into the pot and used to fund future claims.
Peter Lodder QC, chairman of the Bar, said: “We are pleased to announce the formation of this new group which, we hope, will play an important role in informing the Ministry of Justice’s thinking on litigation funding. We are committed to finding ways to ensure that claimants are not denied the opportunity to uphold legitimate legal rights simply because they cannot afford to access the justice system.”
Former Bar chairman, Guy Mansfield QC, who has been working on the idea of a CLAF for several years, will head the working group, which is due to report its interim findings in the summer. Europe Economics has been commissioned to provide a feasibility study.
The Jackson reforms mean lawyers will no longer be able to claim success fees and after-the-event insurance premiums from losing defendants and will instead be required to accept a proportion (up to a quarter) of the defendant’s damages under contingency fee arrangements. There will be a ten per cent increase in damages payable. A new test will be introduced to ensure that overall costs are proportionate.
Announcing the measures, Clarke said: “With no major reform for 15 years, the civil justice system has got out of kilter.
“Businesses and other people who have been sued can find that spiralling legal costs, slow court processes, unnecessary litigation and the ‘no win no fee’ structures, which mean greater payments to lawyers than to claimants, are setting them back millions of pounds each year.”