Success fee agreements: analysis of consultation responses

Question 5: Do you think that formal Government regulation is required to make it clear that providers of relevant services may not provide legal aid, whether in the form of advice and assistance or civil legal aid, when a success fee agreement is in prospect or in place?

60. Twenty-three of the respondents answered this question or made a comment. Twelve agreed and five disagreed that Scottish Government regulation is required to make it clear that providers of relevant services may not provide legal aid when a success fee agreement is in prospect or in place. One respondent was neutral on the point.

61. There was general agreement that legal aid and a success fee agreement should not co-exist.

62. Some, for example, the ABI and Clyde and Co thought it inappropriate to use public funds to investigate a claim where a success fee is envisaged and then move to the success fee once assured that there is a reasonable prospect of success. This removes the risk for a provider and the view is that the Scottish Government should provide regulations to prevent it.

63. Eleven respondents, took a different view considering that a distinction should be drawn here between advice and assistance on the one hand and civil legal aid on the other. At the investigation stage, advice and assistance should be available to those who qualify for it as using advice and assistance may be the only way that some firms can properly investigate a claim. It is only when the claim has been investigated that the provider is in a position to say whether they should enter into a success fee agreement. At that point, full civil legal aid should not be available. Kennedys made the point that it should “not work the other way – once a success fee is in place we do not believe there should be an option to revert back”.

64. Three respondents comment that it was imperative that both advice and assistance and full legal aid must continue to be available for clinical negligence cases. APIL wrote: “These cases require a lot of initial and early investigation, and require expert opinions to be gathered early on, so that a view can be taken on prospects. [After the event] premiums will not be recoverable, and premiums to fund these investigations are expensive. Advice and assistance alone is not sufficient, however, and full legal aid must remain an option for funding of clinical negligence cases. Pursuers often instruct solicitors in a clinical negligence case close to the time bar, and the solicitor needs to raise proceedings to protect the client’s position. Full legal aid must be available to allow proceedings to be raised.”

65. SLAB thought it important that it is emphasised that the policy objective that “legal aid is and should be an alternative method of funding, and that legal aid and a success fee arrangement may not coexist contemporaneously”. It stressed the importance of transparency on this issue and was of the view that if “provision is to include stipulation about matters which must be included either in the agreement itself or accompanying material, then it would be important to include relevant reference to the legal aid position, and specifically to the fact that there can be no legal aid cover so that clients in particular understand the position and are left in no uncertainty”.

66. An alternative view was taken by the Faculty, Iain Nicol, and the Law Society, all of whom thought that further regulations were unnecessary as the position is covered by the existing statutory framework for legal aid.

67. The Law Society added another scenario. This is where the prospects of success do not reach a certain percentage level of 50-60% required for legal expenses insurance cover. It noted that legal aid only requires 51%. If the prospects do not reach the level required by the legal expense’s insurers, then the cover will be cancelled. The recipient may however reach 51% prospects of success and therefore should be able to apply for legal aid.