Funding a Claim: Public Funding ('Legal Aid')

At The End Of Your Case

If your case is to be pursued beyond the investigative phase, there are, in essence, only 2 possible outcomes: either you win or the Defendants win. It may be necessary for a Court to decide who is in the right, or it may be that one side decides to settle the case before it reaches that stage. One way or another, however, there will be a "winning" side and a "losing" side.

At the end of a case, both sides will have run up significant legal costs. The side that loses a litigation claim is, except in exceptional circumstances, obliged to meet the other side's costs. As a result, the way in which legal costs are dealt with is dependent on the outcome of your case.

If you Win

If you are successful in your claim - either by winning a Court case or by obtaining an "out-of-court" settlement - you will not be responsible for the other side's costs, and you will hope to recover your own side's costs in their entirety from the Defendants.

If the LSC has been funding your case, it is entitled to be reimbursed for the money it has paid out. If you are successful in recovering all of your own side's costs from the Defendants, repaying the LSC will be straightforward enough, and will not make any difference to your damages.

However, in some cases, it is only possible to recover some of your side's costs from the Defendants. The losing side are entitled to challenge whether steps taken - and expenses incurred - in your case were necessary. If they successfully argue that they were not, they do not have to pay for them.

For example: at an early stage in your case, you receive a report from a medical expert (say, an anaesthetist), who is not at all supportive of your case. It subsequently becomes apparent (through other expert advice) that the anaesthetist's views were unduly cautious, so your solicitor seeks the opinion of a different anaesthetist and, this time, the opinion given is much more critical of the care you received. If you eventually won your case, the Defendants would be entitled to argue that they should not be held responsible for the costs involved in obtaining the first anaesthetist's report, because it played no part in you winning your case.

This is just an example of the kind of costs that may not be met by the other side, even if you win your case. The Defendants are entitled to challenge any element of your side's costs (including the fees claimed by your solicitor) and, if they are successful, they will not be held responsible for such costs.

If this happens in your case, there will be a shortfall between the money paid out by the LSC and the costs recovered from the Defendants. In these circumstances, it is up to you to meet this shortfall. If you have been paying a contribution, the money you have paid out will be offset against the outstanding fees. If this is insufficient - or if you have not been contributing to your Funding - the LSC is entitled to take the money it is owed from your damages.

You need to be aware that your case may be subject to this process (which the LSC refer to as the "Statutory Charge"). If it is, you may find that your damages are less than you were expecting. You should not worry unduly about this, as, in most cases, it is possible to recover the majority of your side's costs from the Defendants, and any shortfall is not usually that great.

Finally, it is worth pointing out that, if you have been making a contribution to your Funding, some or all of the money you have paid will be returned to you. As explained above, this money is first used to offset any shortfall in money recovered from the Defendants, but any amount which is left over will be paid back to you. If all your side's costs have been recovered from your opponents, you will be repaid every penny you have contributed.

If you Lose

If your claim is ultimately unsuccessful, you will not be liable for any of your own side's costs. These will be met in full by the LSC.

As a rule, the Court will not order a Claimant who has been in receipt of LSC Funding to pay his or her opponent's costs if they have lost the case. However, there are certain circumstances in which it may choose to do so.

Where this is so, the amount you must pay towards the Defendants' costs is decided by the Court, not the LSC. Except in very specific circumstances (essentially, where you have not followed LSC procedures properly), the amount you may be ordered to pay will be calculated with reference to your financial circumstances, and those of the Defendant. This means that, no matter how large the other side's costs are, you will not be presented with a bill that you cannot afford to pay. On the whole, it is unlikely that you will be presented with a bill at all, but you should be aware that this is a possibility.

Compensation Recovery

If you have received Department of Social Security ("DSS") benefits as a result of the injuries you have suffered (for example, Sickness Benefit, or Disability Working Allowance), this may have an effect on the damages you receive if your case is successful.

If someone is found to be responsible for your injuries (i.e. the Defendants), the DSS is entitled to reclaim the money that has been paid to you. The body that oversees this process is called the Compensation Recovery Unit ("CRU"). Their work is based on 2 main principles:

  • a person should not be compensated twice for the same injury; and
  • taxpayers should not subsidise a liable third party in their obligation to compensate a person fully for their injury.

In other words, if the injury you have suffered is someone's fault, they should bear the burden of compensating you and, if you have already received help from the DSS, this money should be repaid to them.

Compensation Recovery only applies to money you are awarded under the head of "Special Damages" (i.e. money to compensate you for your losses; see our guidance on Compensation). Any compensation that is awarded to you as "General Damages" is not relevant to the CRU.

Compensation Recovery only applies to Special Damages which have been calculated in respect of your past losses. As far as your projected future losses are concerned, the CRU will not be involved, though you may find that the money you receive leaves you ineligible for state benefits you have been receiving.

It is important to emphasise that the CRU does not take money directly from you: no matter how much money you have received in benefits since the negligent event, the CRU can only recover money from the Defendants. Nevertheless, you should remember that this money will be deducted from your damages; if you are only awarded a relatively small amount of compensation, and you have received a significant amount of state benefit as a result of your injuries, the Compensation Recovery Scheme can make a noticeable impact on the money you receive. You will not find yourself "out of pocket", but you may find that the compensation you receive is less than you were expecting.