A proposal to support access to justice through a pooled fund financed by money derived from civil damages has been revived in earnest.

The Law Society, Bar Council and Chartered Institute of Legal Executives today announce the formation of a working group to examine the viability of a contingent legal aid fund. It will report by the end of the year.

Law Society president Robert Bourns said the fund ‘could provide a valuable method to fund litigation and facilitate access to justice for those who lack the means to pay for legal services’.

Described by the group as a ‘recyclable, pooled fund’, CLAF would be financed by a levy on damages recovered in successful civil cases where the client was supported by the fund.

The working group, chaired by Justin Fenwick QC, will recommend what changes would be needed to make a CLAF viable, including changes to other forms of funding, legislative changes and changes to the Civil Procedure Rules.

Terms of reference include investigating and reporting whether a non-profit fund could be viable in any area of civil litigation and whether it could be self-sustaining. The group will consider whether a fund could provide a satisfactory means of civil litigation funding alongside, or as an alternative to, existing support. It will also identify how a CLAF could be funded and what arrangements with lawyers, clients, insurers, funders or others would be necessary.

The idea has a long pedigree. In 1978 human rights campaign group Justice published its original proposals for a CLAF. In 1997, in the run-up to the removal of personal injury cases from the scope of legal aid, proposals for CLAFs were made by the Bar Council, Law Society and Consumers’ Association. However, none of the proposals were implemented, with the government instead promoting conditional fee agreements under the 1999 Access to Justice Act reforms.

Earlier this year, Lord Justice Jackson told a conference that the growth of third-party litigation fundings showed that a contingent fund could succeed.

However, master of the rolls Lord Dyson warned last month that the rock on which the idea foundered when it was last considered ‘was the lack of money to provide the seed core’. Dyson feared this could happen again, though he thought the fund was an excellent idea in principle.

Bourns said the group was keen to discuss ways to overcome the obstacles that prevented the idea of a CLAF from proceeding in the past. ‘It is also important to consider any unintended consequences on existing funding options, which are presently working well for people,’ he added.

The group will produce an initial feasibility report by September and a final report by the end of the year.