When can CFAs replace legal aid?

Many practitioners are concerned about the implications of recent delays in granting legal aid whilst the LAA is making detailed investigations about whether CFAs are available – even in cases where they clearly are not.

This issue has arisen since the LAA re-designed the CIVAPP1 form.  Under the Civil Legal Aid (Merits Criteria) Regulations 2013 (Reg 39), the Director of Legal Aid has to consider whether the case is ‘unsuitable’ for a CFA and the LAA has changed the wording on the form so that it matches the regulation.

 Lots of people have mistakenly ticked ‘no’, to the question on p.8 of the form, indicating that they think the case IS suitable for a CFA, and the LAA is now coming back to them for more information.

 The Lord Chancellor’s Guidance on Civil Legal Aid says:

 7.17 The test of suitability for a CFA is an objective one, rather than a question of whether an individual provider is willing to act under a CFA. In principle a non-family case may be considered suitable for a conditional fee agreement if:

– Prospects of success are considered at least at 60%

– The opponent is considered able to meet any costs and/or damages (or other sum of money) that might be awarded

–  After-the-event insurance can be obtained by the applicant

7.18 An applicant without after-the-event insurance seeking services otherwise considered suitable for a CFA will be expected to provide evidence of attempts to secure such insurance. Even where evidence is provided of refusals of insurance, the Director him/herself may make enquiries of insurers to see if they would support a CFA in the individual circumstances

7.19 The absence of after-the-event insurance, perhaps because the applicant cannot afford or defer the premium, will not necessarily be fatal to CFA suitability. In particular, whilst cost protection may be an important consideration for an applicant, in a very strong case the risk of an adverse costs order will clearly be small. For example, if prospects of success are considered at least 80% and substantial disbursements are not required, the case is unlikely to satisfy this criterion.

7.20 The fact that the applicant may wish to obtain legal aid rather than a CFA because of the potential deduction from damages in respect of a success premium or damages agreement, will not of itself prevent a case being suitable for a CFA

What can you do?

 Obviously –make sure everyone ticks ‘yes’ in future!

 Ideas you might try in response to queries by the LAA:

 In cases where there will be no claim for damages (or no counterclaim) the client would not be able to obtain ATE insurance, so a CFA would not be realistic.

 You could try a pre-emptive ‘shopping around’ exercise of trying to attempt obtaining ATE in a couple of typical scenarios, so that you could use those as examples of why a CFA would not be available.

 If you are an NfP agency that does not offer CFAs, you could try asking a friendly firm whether they would accept some typical case scenarios on a CFA basis and again use their response as evidence that such cases are not commercially attractive. If you are a private firm that does offer CFAs, you could set out your criteria for accepting CFAs and why this case would not meet them.

 In many cases, urgent action is required so exploring the possibility of a CFA could jeopardise the client’s case, so not a realistic alternative to legal aid.

 The Legal Aid Practitioners Group understands the LAA’s view is that it may be possible for CFAs to be obtained, perhaps by a limited number of firms with good links to the insurance market and is seeking more information about this.

 LAPG, with ILPA and the Law Society have written a letter to the LAA, which they hope will be discussed at the Civil Contracts Consultative Group meeting on 9th September. This is another example of why it is a good idea to become a member of the appropriate representative body – they can take up issues on your behalf with the LAA. Don’t forget the bargain offer on LAPG membership if you mention the Legal Aid Handbook blog.

Simply email conference@lapg.co.uk and mention the fact that you saw the 14 months for the price of 12 offer on Legal Aid Handbook and tell them you want to sign up. Alternatively, you can go straight to their membership page.

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