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Contingent legal aid fund (CLAF)

Contingent legal aid fund (CLAF)

Last week Lord Justice Jackson called on lawyers to resurrect the old idea of a contingent legal aid fund (CLAF) to back worthy cases.

The idea of CLAF was first floated by legal charity Justice in 1966. The classic model for a CLAF, as described in a 2009 Bar Council discussion paper, is where the fund’s administrators agree to back the claim if the likely chances of success and damages justify support. In return, the client, upon success, pays a percentage of the damages recovered back to the fund. The costs of the successful case are recovered in the ordinary way from the defendant and contributions from the successful claimant’s damages fund future cases.

Lord Justice Jackson, in his final report, gave the idea his tentative backing. “In principle, I support the creation of one or more CLAFs or CCFs [a not-for-profit charitable contingent fund], if a viable financial model for such bodies can be created,” he said, adding that “all the indications” were that “at least in the short term” CLAFs could “only function as an alternative means of funding a minority of cases.”

The Bar Council had previously shown enthusiasm for the idea, setting up a CLAF group in 2009 to investigate the possibility. The project went into abeyance after 2011. Judge Jackson said: “Understandably the profession wanted to see what the scene would be after [my] reforms had been implemented and after any legal aid cutbacks had taken effect.”

Bar Council chairman Chantal-Aimée Doerries QC said it had already opened discussions with the Chartered Institute of Legal Executives (CILEx) and the Law Society to set up joint working party to examine the establishment of a CLAF.

She said: “The Bar Council has supported the development of a CLAF for many years. The civil justice system is currently facing multiple challenges with the result that access to justice for many has become restricted. Lord Justice Jackson’s suggestion that the concept of a CLAF should be re-visited is therefore timely.”

Doerries said: “As experience from overseas has shown, a contingent legal aid fund may provide an additional source of funding the civil justice system and thereby help to address some of the problems many people face about access to justice today. Clearly the viability of a CLAF, and its scope, needs to be considered very carefully in the current context including the civil courts structure review which is being led by Lord Justice Briggs.”

CILEx president David Edwards said: “The funding of litigation continues to pose problems for many individuals who, without the means to pursue cases, are being denied access to justice. Lord Justice Jackson has indicated that now is the time for the legal profession to come together, and collaboratively consider the potential to establish a contingent legal aid fund. CILEx welcomes the opportunity to work together to explore the issues in more detail.”

As the Legal Action Group explained in 2006, there was a risk that the fund may not be big enough unless it takes a “disproportionately high slice” of the compensation. “If conditional fee agreements are available, the cases with the best chances of success will opt for a CFA, so that compensation remains intact, with the CLAF likely to fund cases with low chances of success. The risk here is that the fund will diminish as it pays the costs of more losing cases than winners.”

For the Law Society, president Jonathan Smithers added: “Lord Justice Jackson has put forward some interesting proposals for legal aid funding, which we will consider carefully. The market has changed since this idea was last proposed, and it makes sense to see whether the obstacles which prevented it from proceeding in the past can now be overcome.”

This post was written by:

- who has written 462 posts on Upper Case – The Anya Legal Journal.

Mike Gribbin is a retired Civil Servant with wide experience, including the drafting and implementation of Parliamentary legislation and regulations. He is the editor of “Criminal Offences Handbook”, a uniquely comprehensive guide to more than one thousand ways to fall foul of UK criminal law. He is Editor of the Upper Case Legal Journal and has been writing blog posts for the past eight years.

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