The issue of funding is often one which causes satellite litigation. Indeed, it may have been one of the driving factors behind the civil justice reforms. When the ideas of Jackson LJ were enshrined into legislation in the form of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO), it was envisaged that this would see the end of lengthy disputes in relation to conditional fee agreements (CFAs) and funding.
Perhaps it was befitting that it was LASPO itself which ultimately created one final battle surrounding CFAs. Indeed, it was the issue of changing the method of the client’s funding to a CFA from an alternative funding method, in these cases legal aid, in the lead up to the implementation of LASPO, which has caused much debate.
A number of cases have addressed similar situations, whereby the claimant changed their method of funding prior to the implementation of LASPO, which would provide useful background reading. In particular, Milton Keynes Foundation Trust v Hyde, Arianna Ramos v Oxford University Hospitals NHS Foundation Trust and Oliver Davis v Wiltshire Primary Care Trust. The first case upheld a decision that the move from legal aid to public funding was reasonable. The other two found that the move was not reasonable and the additional liabilities and after the event (ATE) insurance was not recoverable from the defendants.
It was only last month, however, that there was some clarification to this question in the case of Surrey v Barnet and Chase Farm Hospitals NHS Trust, where the previous appeal decision was overturned on the grounds that the High Court judge should not have interfered with the findings of fact made, and the discretion exercised, by the masters and district judge at first instance.
Consideration had to be given to the claimant’s position, and the advantages and disadvantages which each method of funding would attract. The previous High Court decision appeared to downplay the importance of the Simmons v Castle uplift, which would have been a significant benefit to the claimant, had they opted to remain funded by legal aid. If an alternative method of funding was entered into, which was not, on its face, more attractive or had more advantages than the previous method of funding, then consideration had to be given to the circumstances and reasons for such a switch in funding. The reasons should be contained within the advice provided to the claimant when the funding arrangement changed. If it was not, then it would be for the claimant to discharge the burden of proof. In these cases, it was an important fact that there was no reference to Simmons v Castle within the advice provided. Other aspects of the advice were also potentially misleading. It was also a consideration that a significant advantage to the solicitors themselves, the recovery of a success fee, was also not clear when advice was provided.
The case itself perhaps now draws a line under the steady flow of case law on this point, though, in the meantime, there will have been a number of cases which would have been determined based on the law as it existed previously, following the High Court appeal.
Whilst, alone, the financial impact on the claimant’s solicitors of these cases is substantial, the long term impact will, perhaps, be more limited. The fact that it is over five years since the implementation of LASPO means that there will only be a limited amount of remaining ongoing cases, where there has been a change of funding which overlapped with the implementation period. Furthermore, there would have to be a set of facts which mirrors those of this case, and it will still be fact specific to the extent that the key consideration will be the quality of the advice provided by the claimant’s solicitors at the time in which the CFA is taken out. The decision once again shows the importance of transparency and balanced advice, provided by a solicitor to their client regarding the client’s funding arrangements.
This article was first published in Thomson Reuters PRACTICAL LAW DISPUTE RESOLUTION BLOG on 8 May 2018.