Options: third-party backing for cases and contingency fees on the table




Plans for a legal aid scheme where successful claimants in multi-party actions would pay a portion of their damages into a central fund so as to widen eligibility for others were unveiled last week.



The Civil Justice Council's proposals for a self-financing supplemental legal aid scheme (SLAS) were put to a high-level costs forum, where delegates were sceptical that the government would instead divert any money recovered towards criminal legal aid.



The CJC's draft report on funding options - a follow-up to a report it issued in October 2005 - recommended investigating methods that could both improve existing access to justice and also step in if the conditional fee agreement model collapses because of fragility in the after-the-event insurance market.



These also included regulated third-party funding, which it said 'should be recognised as an acceptable option for mainstream litigation', and court-controlled contingency fees for multi-party consumer redress cases 'where no other form of funding is available'.



It further called on the Department for Constitutional Affairs (DCA) to conduct thorough research on whether contingency fees could improve access to justice generally - although the DCA has previously rejected this. Insiders say it would take a new Lord Chancellor for this policy to change.



The report was authored by former Law Society President Michael Napier, Senior Costs Judge Peter Hurst, CJC chief executive Robert Musgrove, Cardiff Law School academic Professor Richard Moorhead and Colin Stutt, head of funding policy at the Legal Services Commission.



Though initially planned for multi-party actions - where there is a particular problem with funding - the SLAS model could, if successful, be rolled out to other areas. There was general consensus at the forum for a SLAS which took a capped portion of the client's damages, and also possibly of recovered costs.



The draft report will now be amended in light of the forum and a final version presented to the full CJC for approval. CJC chairman Sir Anthony Clarke, the Master of the Rolls, has already backed the principles in it.



Law Society chief executive Desmond Hudson argued that giving up a slice of damages 'may well be a worthwhile trade-off' for those who are otherwise unable to pursue their case. However, he added: 'This must not be instead of a properly funded legal aid system.'



Neil Rose