Costs And Funding Notes

Costs and funding

Malleson and Moules: The Legal System

Funding of legal services and Costs

Introduction

Reductions in public spending, but no increase in access to justice .

Public v private nature of the system – whether the justice system is a public service to which every person has an entitlement should they need it and which should be free at the point of delivery, OR whether it is a consumer service which should be self funding and purchase privately, or some mixture of the two.

Funding civil justice

Access to the civil courts is widely accepted as being a key component of a democratic system. If citizens do not have the ability to seek redress for breaches of contract and civil wrongs or to challenge illegal government action, the RoL is meaningless.

In practice the cost of brining or defending civil actions is beyond the reach of most people and criticisms of the affordability gap in civil justice are as strong today as they ever were.

In 2003 High Court judge, Mr Justice Lightman, argued at a reception organised by a mediation group that methods of ADR should be given higher priority in the light of the costs of the civil court system: “The already outrageous and ever-increasing costs of litigation are beyond the means of the more advantaged members of the public including the middle class and small to medium size business entities. They are ruinous, and the threat and risk of the burden of costs must daunt all but the most gung-ho litigant.”

It was for this reason that the legal aid system was developed.

Legal aid

1949 – whether the person lacked the means to pay for it privately and whether the case merited funding (whether it had a reasonable chance of success and whether it was reasonable for public money to be spent).

Total legal aid budget for 2005 was 2 billion

The Access to Justice Act 1999

In 1991 the budget for civil cases was 685m for civil legal aid and increased to 1.4billion by 1996.

Lord Mackay (then Lord Chancellor) – identified ways of reducing costs and improving efficiency by seeking out alternative means of funding and by reorganising the legal aid system. His proposals, which were developed first in a Green Paper and in a modified form a White paper, aroused much debate and controversy but were nonetheless broadly implemented by the Labour Party after it came to power in 1997.

Community Legal Service replaced civil legal aid

Legal aid budget

The Act ended a demand-led system and established a fixed civil budget set annually and capped rather than as in the past being supplemented by extra granting of funds by Parliament if required. The sum allocated to civil cases was for the first time limited to the amount left over after the criminal legal aid fund budget had been spent.

This prioritization of criminal over civil funding was explained by the Government as a requirement of the HRA 1998. The argument is that the right to a fair trial under Article 6 of the ECHR requires that funds are available for a defence to a criminal charge so that this part of the budget must remain demand-led. The HRA 1998 also requires, however, that people have access to the courts in the resolution of their civil duties and claims. The limitation of the civil legal aid budget to that which is left over once the criminal requirements are paid for could, theoretically, leave no money for assistance with civil claims however serious. If this situation arose there is little doubt that it would be the subject of a challenge under the HRA 1998.

Scope and availability of legal aid

Removal of legal aid from personal injuries and business disputes cases. Now funded through Conditional Fee Agreements.

Introduction of new funding code – success rate. BUT the calculating the likelihood of success in percentages is problematic and the likely success rates which must be achieved before funding is granted have been set too high.

Matching need and supply

Prof Hazel Genn in 1999 did a survey into people’s experiences of dealing with legal problems. Found that most people seek to resolve a justiciable legal problem without legal advice or assistance. However, half the people in the survey who had sought to deal with a problem in this way failed to resolve it and abandoned the matter. Genn concluded: “This is a relatively high figure and demonstrates the difficulty of achieving a resolution for many types of problem and the need for advice and assistance in enforcing in enforcing rights and defending claims...what emerges clearly from the approach of the public to the resolution of justifiable disputes is the very limited use made of formal legal proceeding”. There was a “profound need” for knowledge and advice about legal rights and obligations and the procedures available for resolving disputes.

Legal Services Commission Research Unit (2002) – found that over 1.5 million people do not take any action to resolve their legal problems because of lack of knowledge about how to do so. found that people from disadvantaged groups such as those with a long term-illness or disability were more likely to experience legal problems. Identified the important role played by advisers without legal qualifications. 40% of respondents did not seek help with legal problems from traditional sources of legal help such as solicitors or advice centres, but turned to social workers, health professionals, social security officers and religious organisations. This finding challenges our assumptions about the most effective way to try and improve access to legal advice and assistance.

Contracts

The way in which legal services providers operate has been fundamentally reorganised through the introduction of a contract system. Under the old system, lawyers were paid on a case-by-case basis for the work they did. Under the current system, lawyers either in the not-for-profit sector or private practice bid for a contract to undertake work in a certain area or work for a certain period of time. If their bid is successful...

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