1. English Legal System Alternative Dispute Resolution
Introduction to Funding Civil Litigation

2. Aims The aims of this lecture are to:
Examine the alternatives to litigating matters through the courts in civil proceedings;
Analyse the differences between forms of ADR and in particular arbitration and meditation;
Look at the public funding of civil litigation and recent reforms which have been made;
Examine other ways of funding litigation other than public funding;
To look at whether there is need for greater public funding of litigation.

3. Learning outcomes By the end of this lecture you should be able to:
State what is meant by alternative dispute resolution;
Describe the differences between arbitration and meditation;
Critically assess the advantages and disadvantages of using alternative methods of dispute resolution rather than litigating matters through the courts;
Describe the current arrangements for public funding of civil litigation in England and Wales;
Describe the alternative funding which is available to litigants in this country;
Critically consider whether the present arrangements meet the needs of litigants.

4. ADR Definition
ADR involves the settling of legal disputes without having recourse to the courts, to traditional adversarial litigation
It can take a number of forms the most common of which are arbitration and mediation
It has become particular popular in this country following the success that it had in the United States

5. Arbitration Governed by the Arbitration Act 1996
An arbitrator who is impartial, independent of the parties will hear the case and than impose a decision on the parties
This decision can be enforced
This is the most formal type of ADR and is common in contractual disputes, construction disputes and other major commercial agreements

6. Arbitration Why contractual disputes?
Often involve, if a commercial large-scale organisation a lot of money – delays can cost a fortune
Also the contract itself will often include an arbitration clause, partly for the reason stated above, to avoid wasting money

7. Mediation
The mediator works between the parties to promote settlement, however, any settlement reached is consensual, and generally non-binding on the parties
Contract with conciliation
Very informal system
Traditionally associated with matrimonial disputes, but now being used in other more diverse areas of law such as negligence claims, judicial review etc…

8. Why found traditionally in matrimonial law?
Essentially because of the continuing nature of the relationship between the parties if they have children
Does it always works in those situations though?
Family Law Act 1996, Part II

9. Why avoid litigation?
The disadvantages of traditional litigation were summarised by Lord Woolf in his reports:
Too expensive;
Too slow;
Too adversarial.
Civil Procedure Rules aimed at tackling these problems
Litigation is a lottery?

10. What are the advantages of ADR?
These may be summarised as being:
Cheaper;
Faster;
Informal;
Convenient;
Private;
Agreed solutions.

11. The Courts’ Encouragement of ADR
CPR Rule 1.4
Cowl v Plymouth City Council (2001) – Lord Woolf
Dunnett v Railtrack (2002)
A change in direction:
Hurst v Leeming (2002)
Halsey v Milton Keynes General NHS Trust (2004)

12. The cost of civil litigation - what are costs?
Basic costs/ profit costs
Disbursements

13. The cost of civil litigation
Funding your own solicitor’s costs
Paying for your opponent’s
Supreme Court Taxing Office Survey :
In 50% of cases worth less than £12,500 costs of one side were equal to or greater than claim value
1991 Which? Report: 10% of people put off finding a solicitor by cost

14. Access to Justice and Costs - the Government’s stated objective
“The justice system should serve everyone, regardless of their means. People should be able to find effective solutions to their legal problems. Justice must not be restricted to the very wealthy, or the very poor, who may qualify for legal aid. At the same time, taxpayers deserve value for the money they contribute to legal aid and the courts” - Lord Chancellor’s forward to “Modernising Justice” Government White Paper 1998.

15. Funding Options Private payment Before the event insurance
Pro bono work
Law centres and CABs
Trade Unions
Special Interest groups

16. Funding Options Civil Legal Aid 1949 - late 1990s
Means test
Disposable income no more than £7595 p.a
Disposable capital no more than £6750
Merits test
Reasonableness
Legal Merits

17. Report of Sir Peter Middleton to The Lord Chancellor (September 1997)
Rapidly growing costs with lack of satisfactory mechanisms for controlling growth
Inability to target resources on priority areas
Poor value for money.

18. Rapidly growing costs Fewer people helped
number of certificates increase by 22%. Net expenditure increased by 145% to £153 million
% eligible
% eligible

19. Cost of Legal Aid The legal aid bill too high for the taxpayer
costs for all family and civil: £671million 97/98
costs 93/ /97  22% . Inflation was 7%
90% of the costs are lawyers’ fees
Numbers being assisted falling
Civil legal aid was entirely demand, rather than resource, led

20. Poor value for money
No control over which law firms, good or bad, could obtain legal aid
Lawyers who ran legal aid cases took no risk and were tempted to run cases that had very poor prospects of success

21. Conclusion reached by this government
“Should legal aid also be offered in cases where other arrangements already exist to support litigants? I think not.”
Lord Irvine, the Lord Chancellor
Almost all personal injury legal aid disappeared in April 2000
Access to Justice Act creating the Legal Services Commission
Community Legal Service

22. Some counter arguments
Only £55 million spent on legal aid PI cases 95/96
£518 million recovered in damages
DSS clawback estimated at £67 million in 95/96
Can conditional fees replace it?

23. The Community Legal Service (CLS)
LSC: Legal Services Commission (set up by the Access to Justice Act 1999)
LSC is a publicly funded body managed independently which exercises its functions in relation to funding for civil disputes through the CLS
A controlled budget
Planning
Contracting
A new funding assessment

24. Contracting
S.6(3)(a) Access to Justice Act 1999 gave the LSC the power to enter into contracts with bodies or persons for the provision of services
s.4 (8) gave the LSC, or others it authorises to do so, power to accredit bodies to provide services
and the power to monitor the services provided and withdraw accreditation if the services are of unsatisfactory quality

25. Legal Aid Franchise Quality Assurance Standard (LAFQAS) Now known as Quality Mark
To obtain a contract a provider must have this
The CLS monitors management of the provider in general and of individual cases
“Contracting will help to ensure the quality of service consumers receive; only those lawyers who meet prescribed quality standards will be able to obtain contracts, and their performance will be monitored” (White Paper, Modernising Justice para 3.18).

26. Priorities Social welfare cases
Other cases of fundamental importance to the people affected
Cases involving a wider public interest

27. Cases generally excluded from funding Sched. 2 AJA 1999
Negligently caused injury
Conveyancing, boundary disputes
Making of wills
Trust law
Defamation
Matters arising out of the carrying on of a business

28. Criticism of the new system
Fall in number of solicitors doing this work survey of 150 firms by the Law Society Gazette:
57% already given up legal aid contracts
11% ceasing housing work
Recently qualified solicitors turn their backs on work?

29. Summary of lecture You should now be able to:
Describe the different forms of alternative dispute resolution and in particular arbitration and meditation;
State what options are available for the funding of civil litigation;
Describe the system of public funding and the reforms which have made to it;
Critically consider whether those reforms have been successful in meeting the needs of litigants in civil cases.

30. Further reading
Slapper, G. and Kelly, D., The English Legal System (London: Cavendish Press, 2004, 7th edition), chapter 12 generally