A working party has determined that a Community Legal Aid Fund (CLAF) probably won’t work unless sufficiently funded from the outset. The CLAF model involves creating a pool from which funding for legal cases could be drawn, subject to successful claimants forfeiting some of their damages. (Sound familiar? Hint…. damages-based contingency fee agreements and success fees payable under conditional fee agreements (No-win –no fee) which are private agreements operated by law firms but in other respects have a similar outcome). The CLAF could be used to plug gaps in litigation funding, for example where CFAs and contingency fee agreements are not available or they could compete against After The Event legal expenses insurance for those who do not have Before The Event.
The working party has concluded that a major problem is finding “seed funding” to commence new cases in advance of revenue being generated. A further challenge may be to design a scheme that offers acceptable terms to lawyers. “For profit” and “not for profit” CLAF options are being contemplated and interested parties are invited to complete a survey. Here’s a link to the full article from Litigation Futures and the CLAF survey. http://www.litigationfutures.com/news/profession-wide-working-group-outlines-initial-doubts-viability-claf
My own view is that it would be interesting to see some figures on the number and type of cases that could be suitable for CLAF funding on the basis that exisiting funding methods are unavailable; together with a forecast of the impact that court digitisation is likely to have on current case numbers. If more disputes can be resolved on- line without the need to engage a lawyer the need for the CLAF model will reduce. There seems to me to be little point in setting up a funding mechanism to compete against ATE and BTE so I believe the CLAF proposition will need to focus on claims that are not picked-up by LEI.
Finally, if a CLAF does get the go-ahead it will only ever get off the ground if the public are suitably educated. This could be a further major challenge. Public awareness of LEI is gaining traction but it has been a slow journey.