Unclaimed class action cash distributed by the Access to Justice Foundation to fund free legal advice could deliver a significant return, a report from the grant-giving body has suggested.
Under the Consumer Rights Act 2015, the foundation is the nominated recipient of unclaimed damages awarded in opt-out collective proceedings at the Competition Appeal Tribunal. Recipients of £3.7m in unclaimed cash from the boundary fares class action settlement were announced earlier this month.
A report published by the foundation today reveals that for every £1 invested in free consumer advice, £10.40 is recovered in direct financial benefit. However, the report also highlights the challenges faced by organisations reliant on the foundation’s funding. Nearly eight in 10 advice providers said the foundation’s funding was essential to their operations.
One provider said they were unable to answer three quarters of incoming calls. Of the calls answered, they could only take on 40% of the clients. More than half of firms turned down cases involving housing disrepair or representation at an employment tribunal.
A client with a learning disability who was unable to get timely advice was scammed out of £5,000. The report says the client received a phone call from someone posing as their bank, instructing them to send £5,000 to a Post Office box. The client sought help from their local advice centre but the centre was closed. After sending the cash, the fraudster called again, demanding more. The client was able to speak to their advice centre, who stopped them from sending any more money.
The report says: ‘Opening hours, staffing levels and waiting times all shape whether someone in crisis can access support at the moment they need it most. For clients with vulnerabilities, whether financial, cognitive or otherwise, these gaps in support are the difference between a problem contained and one that spirals.
‘This is particularly acute for clients who may not recognise they are being harmed, or who lack the confidence or ability to navigate systems alone. When advice or support is not available, these clients do not always wait or are able to find help elsewhere, they proceed, often into situations that become much harder to resolve.’
The foundation has been named as the appropriate recipient of unclaimed cash in three settlement judgments. The legal charity told a Department for Business & Trade consultation last year on the collective actions regime that it should also receive unclaimed cash from opt-out collective actions where a settlement has been reached before trial.
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