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.
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