Payment plans

Yuri Rapoport considers how barristers can assure revenue in low to middle quantum cases, despite the “big squeeze” on legal funding

Two years since the latest round of legal aid cuts, the soaring number of unrepresented cases being heard in the courts have all but crushed the Government’s hopes of people pursuing less expensive and less confrontational means of settling disputes. 


However, this did not stop the Government from recently exerting further pressure on litigants by increasing court fees to unprecedented levels, resulting in an agonizing squeeze on legal funding for barristers and clients.

In the absence of signals that current policies on legal aid may be reversed, one could be forgiven for construing the future of legal funding as relying mainly on support from the private sector. If so, then access to justice will most certainly shift from its cradle of government responsibility to become a form of tradable commodity enabled by alternative funding solutions.

In fact, litigation funders have been pushing this idea for years, offering their services to the high-quantum end of the legal case spectrum. However, with a modest funding conversion rate of under 10%, which leaves over 90% of high quantum cases unfunded, what hope is there of finding private funding solutions for matters with low to middle quantum profiles, and worse still, for cases with no quantum aspect at all?

Presently, attempts to bridge the legal funding abyss are limited to solutions such as “after the event” insurance, which, coupled with contingency agreements, enables barristers to invest their own time in cases at no (or reduced) costs to clients. However, following the Lord Justice Jackson reforms, the appeal of taking cases on “full contingency” is potentially nearing the end of its shelf life. More and more barristers (particularly those practising in the direct access arena) are now imposing limits on their contingency caseloads to avoid straining resources that are otherwise vital to sustaining their daily practices.

The bottom line is that barristers are in need of regular payment for their skills, and both the legal services market and the Government are in need of innovative solutions, borne by the private sector, that can offer access to justice via effective alternatives to legal aid.

One such solution, which boldly takes a page from the operating manuals of industries such as insurance, retail and auto-trade, could be the use of consumer credit facilities in the form of “payment plans” as a means to fund certain sections of the legal services market.

How payment plans work

Payment plans could offer greater affordability for clients and in turn enable barristers to enjoy much-needed relief from cash flow constraints. Put simply, clients are more receptive to paying costs by small instalments over longer periods than paying large sums up-front. So, when barristers provide cost estimates to their clients or chase unpaid fees, they can suggest the option of payment plans (underpinned by consumer credit facilities) to help settle legal bills through convenient repayments over extended periods.

Whilst such consumer credit solutions can conceivably offer the same type of convenience that shoppers enjoy when using credit cards, barristers can actually go a significant step further to meet their client’s funding requirements. By offering moderate discounts (5-10%) on their fees to offset clients’ financing costs (ie cancel out the interest rate), barristers can enjoy the security of pre-approved funds to cover ongoing and future billing while enabling clients to have access to “cost-neutral” financing.

The outcome is simple: barristers get their fees paid on time and in full, while clients enjoy access to private sector funds at effectively no cost. In essence, payment plans not only represent a veritable alternative to legal aid funding, but also offer a simple and highly effective payment arrangement that can assist barristers and clients in virtually all types of matters.

What people are saying

Some barristers’ chambers are already employing payment plan solutions with quantifiable success. Stephen Evers, Practice Director at 3 Paper Buildings, is delighted with the imminent improvements to his set’s revenues after adapting payment plan solutions. One of his senior barristers, Graeme Sampson, believes that offering the plans to clients is a revolutionary idea. He refers to them as: “…a relevant and timely proposition, which not only addresses the cuts in legal aid but provides a workable solution for many types of clients and cases. It is a meaningful step in the right direction that will be of great benefit to the future of legal practice.”

Brian Lee, Chairman of the Institute of Barristers’ Clerks, who has been a supporter of payment plans from the outset, says that the idea of simple, “cost-neutral” credit solutions is “a long-awaited breath of fresh air”, and he salutes the fact that professional bodies, such as the Bar Council, are also getting behind it.

Paul Mosson, Director of Services at the Bar Council, commented: “We believe that these types of alternative finance solutions will provide barristers with another valuable tool to secure work, and offer peace of mind to both the barrister and the client.”

By supporting private sector funding initiatives, the legal profession has acknowledged that legal services are, in essence, exposed to the same market forces as other consumer-facing industries. The message is loud and clear: consumer credit solutions should be as much a part of the legal services market as auto-finance is an indispensable instrument to the motor vehicle industry.

Greg Morris of Auto Audio Installations, who recently used a payment plan to pay for his public access barrister, drew on this comparison. He said: “Having worked in the auto industry for many years, I was pleased to find that the legal profession offered an analogous financing solution. It gives you confidence knowing that you can now afford the barrister you want.”

The benefits of consumer credit for legal services should also be welcomed by the Government, which faces increasing scrutiny over the impact of legal aid cuts, as highlighted by Mark Hatcher in a recent instalment of Westminster Watch. The Government has greater responsibility than ever before to minimise pressure on public expenditure, and some say they might achieve this by ensuring that those consumers applying for legal aid, who would otherwise qualify for private sector funding, exhaust consumer credit funding options as a first port of call.

In fact, given the palpable need for effective funding solutions, it is curious why the Government hasn’t already taken the initiative to invigorate the legal services market by consumer credit incentives on any significant scale.

Clearly, constructive steps are available to improve funding levels for legal services without relying solely on Government resources. By aligning with consumer credit providers and ensuring that individuals who apply for legal aid have considered private funding options, the Government may, with a single decisive swoop, significantly alleviate pressure on legal aid, reduce the number of unrepresented cases in the courts, and mend the heavily dented revenues currently endured by legal professionals.

Contributor Dr Yuri Rapoport, Legal Cost Finance

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Dr Yuri Rapoport

Yuri has dedicated over 20 years of his professional career to the development of solutions that help consumers gain access to justice. His latest project is Legal Cost Finance.