The old legal aid schemes were demand led and so if an applicant met the means and merit test then their case would be funded and this lacked any control over the financial side of the schemes. Now there will be a Community Legal Service Fund containing a fixed amount set each year by the Government. The intention is that this fund will be supervised by the Lord Chancellor who will set the requirements for funding cases by both the professional and voluntary services.
The details (criteria and procedures) of how the fund will be spent will be contained in a FUNDING CODE drawn up by the Legal Services Commission and approved by the Lord Chancellor. There will continue to be both merit and means tests in civil cases with contributions being payable where appropriate. There is unlikely to be major changes in the means tests until greater funds are available (these though will have to come from savings within the scheme).
From the information available at present (see booklet) the schemes look very similar to the old schemes – the only changes are that the limit of work for Legal Help and Help at Court is now i?? 500 and allowances for spouses and dependents have risen slightly. The merit test will be set within the Funding Code and is thought to become more flexible than the current "chance of success" test. The new scheme has separated family/matrimonial cases to reflect the mediation approach to family disputes to encourage the parties to reach a mediated settlement than having to go through the courts.
To try to ensure the quality of the service provided the Access to Justice Act 1999 has developed and extended the "franchising" scheme introduced in 1994 by the Legal Aid Board. The 1999 Act has established a scheme of contracts with law firms and since April 1st 2001 only firms with such contracts will be able to get state funding for advice and representation given. The Legal Services Commission is to set up a quality mark (see below) and this together with the contracting scheme will help consumers feel more confident of the service they will receive from the suppliers of legal advice.
Many lawyers in America work on what is known as a "No Win, No Fee" or Contingency Fee Basis – they charge no fee if they loss the case but will take a percentage of the damages awarded. The more difficult or unlikely they are to win then the higher the percentage will be charged. Contingency fees are banned in this country but under the Courts and Legal Services Act 1990 Conditional Fee Agreements were introduced.
Under a Conditional Fee Agreement a solicitor agrees to take either a reduced or even no fee if they lose but will raise their fee by an agreed percentage – an uplift or success fee – if they win. The maximum a solicitor can charge is twice their usual fee and the amount of the uplift reflects the risk of losing involved. The normal rule that the loser must pay the winner's cost still remains and so it is usual for the client to take out insurance in case of the eventuality.
The Access to Justice Act 1999 made changes to Conditional Fee Agreements which were made to try to encourage their use particularly in those areas no longer covered by legal aid. Where a person subject to a Conditional Fee Agreement wins their case the Courts can order the losing party to pay both the success fee and also the insurance premium paid. The Access to Justice Act 1999 now allows Conditional Fee Agreements to be used for all cases except medical negligence cases. This generally is due to the difficulty and uncertainty involved with medical negligence cases but this may change in the future.