Consultation on amendments to Legal Aid: product liability claims to be excluded from public funding

United Kingdom

The Legal Services Commission has issued consultation on a number of proposed amendments to the Legal Aid system. Responses are requested by 15 October 2004. The policy is to re-prioritise public funding of civil litigation on deserving cases and priority areas, against a background that legal aid is now operating within strict budgetary constraints and under strong pressure.

The main points relevant to product liability claims and group actions are as follows. Unnecessary public funding of litigation would be discouraged by providing that alternative resolution schemes (Ombudsmen, mediation or complaint mechanisms, such as the proposed NHS Redress scheme for clinical negligence claims) should be exhausted before public funding is made available. Cases should shift from legal aid to CFAs after all investigative work has been concluded.

Further, since there are now 5 years' experience with privatised conditional fee agreements (CFAs) and other funding mechanisms, legal aid would, it is proposed, be refused for any general case suitable for a CFA, whether or not insurance is in practice available. The power to refuse funding for group actions would be extended to child abuse and housing actions, continuing the policy of funding generic work but requiring individual claims to be brought on CFAs.

A loophole would be closed which permits legal aid for personal injury claims based on product liability or breach of statutory duty, but currently excludes it for negligence: all would be excluded (save for clinical negligence).

There are also a series of detailed changes designed to make people contribute more to their cases (removing some cost protection), to permit funding to be more easily withheld on cost-benefit or unaffordability grounds, and to simplify the rules. Family law issues now account for 80% of all new certificates.

The Department for Constitutional Affairs is undertaking a Fundamental Legal Aid Review, looking at the long-term future of the system. This will include a review of whether US-style contingency fees should be permitted, as was recently recommended by a government think tank, the Better Regulation Task Force.

The effect of these changes is to reinforce the policy that legal aid is not a right but discretionary, and resource-constrained public funds can be directed at particular areas and away from others, or only made available subject to conditions, such as where the assisted person assumes some financial risk. The options for funding litigation are leading to more complex options, and may well be extended further to encompass contingency fees, which are seen as having the benefit of simplicity when compared with the rather more complex CFA and insurance system.

For further information please contact Dr Christopher Hodges on +44(0)207 367 2738 or at [email protected]