Session 3: Effective Access to Justice - UFRGS · Alvim Wambier (Catholic University of São Paolo,...

John SORABJI (UK)

International Association of Procedural Law Seoul Conference 2014 1

Session 3: Effective Access to Justice

3.2. The Crisis of Legal Aid and the Alternative Solutions (Legal

Insurance, Third-party Funding, Public Support of Mediation, etc.)

General Reporter

Dr. John Sorabji, Senior Judicial Institute Fellow, Judicial Institute,

Faculty of Law, University College, London, UK

National Reporters

National Report: Argentina - Dr. Francisco Verbic (Coordinador Ejecutivo de

la Maestría en Derecho Procesal at Facultad de Ciencias Jurídicas y Sociales de

la UNLP)

National Report: Brazil - Prof. Eduardo Talamini (Federal University of Paraná,

partner at Justen, Pereira, Oliveira & Talamini), Dr. César A. Guimarães

Pereira (attorney at Justen, Pereira, Oliveira & Talamini, Prof. Teresa Arruda

Alvim Wambier (Catholic University of São Paolo, Brazil)

National Report: Uruguay - Dr. Santiago Pereira Campos (Senior Partner,

Rueda Abadi Pereira)

National Report: Canada - Mr. David McKillop (Senior Vice-President, Legal

Aid, Ontario), Professor John McCamus (Chairman of the Board and CEO of

Legal Aid Ontario)

National Report: Israel - Professor Michael Karayanni (The Hebrew University

of Jerusalem), Assaf Tabeka (doctoral student, The Hebrew University of

Jerusalem)

National Report: Poland - Professor Kinga Flaga-Gieruszynska (Szczecin

University)

National Report: South Korea - Dr E.H. (Eun Hyeon) Kang (Attorney at Law,

member of Korean Bar)

National Report: South Africa - Prof dr Danie van Loggerenberg SC

(Extraordinary Professor of Law, University of Pretoria, Pretoria; member of

the Pretoria Bar) and Mr F Haupt (Director: Legal Aid Clinic, University of

Pretoria, Pretoria; attorney)


2 International Association of Procedural Law Seoul Conference 2014

Dr. John Sorabji1

The Crisis of Legal Aid and Alternative Solutions

(1) Preamble

This report considers the present so-called crisis in legal aid provision in a

number of jurisdictions throughout the world. In doing so, it also considers the

development and provision of a number of alternative mechanisms through which

individual litigants can fund legal proceedings i.e., legal expenses insurance, the use of

contingency fee agreements, and third party funding, and – to a limited extent – other

mechanisms, such as mediation. Its focus, however, is primarily litigation funding as a

means to secure access to the courts and through that rights vindication.

The report is based on a number of national reports, which in turn seek to

answer a series of questions concerning the provision of litigation funding within

specific jurisdictions. It is also based on my own knowledge of legal aid, contingency

funding, legal expenses insurance and third party funding in England and Wales;

reference to England and Wales is made throughout the general report in order to

expand upon issues discussed from the national reports. The questions considered by the

national reporters are reproduced at ANNEX A. Details of the jurisdictions and national

reporters are set out at ANNEX B. It should be stressed at the outset that I am extremely

grateful for all the help and support provided by the national reporters, all of whom very

generously gave their time and expertise. The national reports are reproduced, subject to

minor formatting changes, at ANNEX C. The report does not seek to provide a detailed

analysis, comparative or otherwise, of the jurisdictions covered by the national reports,

nor does it seek to replicate that which is set out in those reports.

(2) Introduction

Effective access to the courts in order to vindicate rights is a fundamental right,

one of ‘fundamental importance2’ to both those whose rights are alleged to have been

infringed but equally to those who wish to defend such claims. As Lord Diplock put it

in Attorney-General v Times Newspapers Ltd

‘. . . in any civilised society, it is a function of government to maintain Courts of Law to

which its citizens can have access for the impartial decision of disputes as to their legal

1 Senior Judicial Institute Fellow, Judicial Institute, Faculty of Law, University College, London;

Principal Legal Adviser to the Lord Chief Justice of England and Wales and the Master of the Rolls. This

general report sets out the personal views of the author. It does not nor is it intended to represent the

views of any one else. Any errors are, also, entirely the author’s responsibility. 2 F. Francioni, The Rights of Access to Justice in Customary Law, in F. Francioni (ed), Access to Justice

as a Human Right, (Oxford, Oxford University Press) (2007) at 1.

John SORABJI (UK)


rights and obligations towards one another individually and towards the State as

representing society as a whole. The provision of such a system for the administration

of justice by Courts of Law and the maintenance of public confidence in it, are essential

if citizens are to live together in peaceful association with one another.’3

Access to the courts is not just of fundamental importance, nor simply a function

of government. It is recognised as a constitutional right, at common law, in the United

Kingdom4 and within numerous states’ codified constitutions e.g., those of the United

States of America5 and the Republic of South Africa

6. It is equally recognised and

guaranteed within regional human rights instruments, such as the Universal Declaration

of Human Rights7, European Convention on Human Rights

8 or the American

Convention on Human Rights9.

Effective access to the courts is however dependent on a number of factors, one

of which is an individual’s ability to fund the cost of litigation. This applies whether a

state requires each litigant to bear their own legal costs, as is the general rule in, for

instance, the United States of America, or whether it applies a cost-shifting rule, such as

that in place in England and Wales10

. Absent an ability to fund litigation, a state’s

constitutional guarantee of access to the courts is no more than a formal one. It brings to

mind the cynical comment that ‘justice is open to all - like the Ritz Hotel.11

’ During the

court of the 20th

Century, as Cappelletti and Garth rightly noted it was not sufficient to

simply recognise ‘formal . . . rights of access12

’. Access to the courts could not be a

merely theoretical right, but one that was, as the European Court of Human Rights

recognised both ‘practical and effective13

’.

In the context of litigation funding the primary means through which the access

right was made real was through the development of legal aid schemes during the first

half of the 20th

Century’s evolution of the welfare state. In Cappelletti and Garth’s terms

this formed the first wave of access to justice reform14

. In the United Kingdom, for

3 [1974] AC 273 at 307.

4 Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corp [1981] AC 909 at 979:

‘Every civilised system of government requires that the state should make available to all its citizens a

means for the just and peaceful settlement of disputes between them as to their respective legal rights.

The means provided are courts of justice to which every citizen has a constitutional right of access in the

role of plaintiff to obtain the remedy which he claims to be entitled to in consequence of an alleged

breach of his legal or equitable rights by some other citizen, the defendant.’ 5 Constitution of the United States of America, v, vi, vii and xiv amendments.

6 Constitution of the Republic of South Africa, article 34.

7 Universal Declaration of Human Rights, articles 10 and 11.

8 European Convention on Human Rights, article 6.

9 American Convention on Human Rights, article 8.

10 That is to say, a rule that requires the losing party to bear their own costs and the winning party’s costs.

11 Attributed to Sir James Mathew.

12 M. Cappelletti and B. Garth, Access to Justice and the Welfare State: An Introduction, in M.

Cappelletti (ed) Access to Justice and the Welfare State, (Brill) (1979) at 1. 13

Airey v Ireland (1979) 2 EHRR 305 at [24]. 14

M. Cappelletti and B. Garth op. cit. at 4.



instance, this arose as a consequence of the Rushcliffe Committee’s report15

from 1945,

which applied the principles articulated in the previous Beveridge Report concerning

the establishment of the welfare state to legal aid provision16

. This resulted in the

introduction of a comprehensive legal aid scheme through the Legal Aid and Assistance

Act 194917

. In the Netherlands similar concerns regarding the provision of legal aid as

an aspect of the welfare state saw its introduction of a similar legal aid scheme in 195718

.

In the United States, it was a product of the creation in 1965 of the Office of Economic

Opportunity19

, although legal aid’s proponents had been arguing for the introduction of

such schemes since at least the first decade of the 20th

Century20

. Such developments,

through providing financial assistance to individuals who could not afford to fund

litigation from their own resources meant that, initially at least, in the United Kingdom

80% of the population could receive such assistance for certain classes of case21

, while

in other countries, such as Finland, legal aid provision as recently as 2002 covered up to

75% of the population22

.

The provision of legal aid as a means to secure effective access to the courts has

however been in retreat for some time. This can be attributable to a number of factors.

First, it can, following Bobbitt, be attributed to a general retreat from the welfare state

and its replacement a market state conception of the state23

. On this view, as a state

ceases to see itself as committed to securing the well-being – welfare – of its citizens

and rather committed to maximising their opportunities, it will necessarily reduce, and

then cease, its commitment to welfare programmes such as legal aid provision.

Secondly, it is an aspect of the welfare state that does not command a significant degree

of public support, when contrasted with, for instance, the provision of health care, social

security and education. It is thus an aspect of the welfare state to which government can

more readily apply spending cuts24

; a point in England and Wales at least, which goes

someway to explain why its legal aid provision has been consistently reduced from the

1970s onwards. Thirdly, and this builds on the second point, the recent past has seen a

number of countries suffering the consequences of the global financial crisis, which

commenced in 2007.

15

Report of the Committee on Legal Aid and Legal Advice in England and Wales, Cmd. 6641 of 1945,

HMSO. 16

W. Beveridge, Social Insurance and Allied Services, Cmd. 6404 of 1942, HMSO. 17

HMSO, 1949, c. 51 18

For a discussion see, for instance, T. Goriely, Legal Aid in the Netherlands – A View from England, 55

MLR 803 at 805 – 806. 19

D. Rhodes, Access to Justice, (Oxford, Oxford University Press) (2004) at 62ff; M. Cappelletti and B.

Garth, op. cit., at 4ff. 20

See, for instance, R. Heber Smith, Justice and the Poor, (1919) (Carnegie Foundation). 21

J. Hynes & S. Robins, The Justice Gap, (2009) (London, LAG) at 21. 22

Legal Aid 2002 (257; Oikeusapulaki), for a discussion see, L. Follett, Access to Justice – Rights or

Rations? Comparing European Legal Aid Systems in the Context of a Shrinking Budgetary Environment,

Plymouth Law Review (2008) 1 at 18. 23

For a summary of his views see, P. Bobbitt, The Garments of Court & Palace, (London, Atlantic

Books) (2013. 24

J. Freedland cited in J. Hynes & S. Robins, op. cit. at 22.

John SORABJI (UK)


One consequence of this has been the reduction in welfare provision generally,

and legal aid has not been exempt from that. Again, looking to England and Wales, one

consequence of the financial crisis was the sharp reduction in legal provision enacted

via the Legal Aid, Sentencing and Punishment of Offenders Act 201225

. It is however

outwith the scope of this paper to consider these, and other possible reasons, lying

behind the reduction in state legal aid provision. The retreat from legal aid in some

states has been accompanied by the development of alternative funding mechanisms,

some of which have been well established in other countries. This report considers three

of these mechanisms: contingency fee funding; the provision of legal expenses

insurance; and third party litigation funding. Each of these means of litigation funding

has a long provenance.

Contingency fee funding, by which is meant an agreement between a lawyer and

their client that the latter is only under an obligation to pay the former’s costs in the

event that the claim is resolved in their favour i.e., it’s a no-win, no fee agreement, has

been a feature of litigation in the United States since the 19th

Century26

, although as

Kritzer notes it was only in the 20th

Century that they became commonly used27

. Their

use has spread from there. They have become available, in varying forms, and primarily

over the course of the 20th

Century in, for instance, Australia, Brazil, Canada, France,

Greece, Israel, Italy, Japan, South Africa and the United Kingdom, Uruguay28

.

Legal expenses insurance is simply a form of insurance that covers the cost of

litigation for those individuals who take out such policies. There are, in general, two

forms of such insurance: before-the-event (BTE) insurance; and after-the-event (ATE)

insurance. The former can be taken out as an element of other forms of insurance, such

as home or car insurance, or as an optional add-on to such insurance29

. In the United

Kingdom, for instance, this is the predominant form of legal expenses insurance. It can

also be taken out as a stand-alone form of insurance, which is generally the case in

jurisdictions such as Germany and Sweden30

. The latter was, until 2013, a common

feature of litigation funding in England and Wales as it complemented the form of

contingency fee funding that was in place there from 1995 – 2013. It was generally

taken out in order to cover any potential financial liability that might arise if the litigant

lost the claim: the insurance would cover any costs the litigant would have to pay the

other party in the event the other party won. The cost of such a policy would, until 2013,

be recoverable as a cost in the litigation if the litigant taking out the ATE policy won the

litigation: the cost being recoverable from the losing party31

.

25

HMSO, 2012, c. 10. 26

P. Karsten, Enabling the poor to have their day in court: the sanctioning of contingency fee contracts, a

history to 1940, 47 DePaul Law Review 231 (1998) cited in H. Kritzer, Seven Dogged Myths Concerning

Contingency Fees, 80 Wash. U. L. Q. 739 (2002) at 744. 27

H. Kritzer, ibid. at 744. 28

H. Kritzer, ibid. at 745 – 747; Brazil National Report, infra.; Israel National Report, infra; South Africa

National Report, infra; Uruguay National Report, infra. 29

See, for instance, Brazil National Report, infra; Canada National Report, infra. 30

See L. Follett, op. cit., at 5. 31

A. Zuckerman, Zuckerman on Civil Procedure: Principles of Practice, (London, Sweet & Maxwell)

(2013) at 1386ff.



Third party funding is the most recent innovation in litigation funding. While it

has long been available where, for instance, trade unions provide litigation funding for

their members, it has started to develop beyond such a limited basis. Developments in,

for instance Australia and the United Kingdom have seen the growth of businesses that

are prepared to fund litigation at a price. This has occurred notwithstanding a continuing

uncertainty whether such arrangements are contrary to public policy, and possible

tortious. Other jurisdictions have seen the growth of not-for-profit agencies, which are

prepared to fund litigation. Finally, and to a very limited extent, other potential

reforms, including the growth in mediation is examined.

This report now turns to an examination of the issues discussed in the national

reports. It first examines legal aid provision, then contingency fee funding before

turning to third party funding. The final twos section deal with legal expenses insurance

and, finally, other alternative, or complementary, approaches to legal aid funding. The

first examines the provision of such insurance, as set out in the national reports.

(3) Legal Aid

In 1979 Cappelletti and Garth drew the conclusion that ‘Legal aid continues to

occupy a central role in the access-to-justice movement.32

’ The position outlined in the

general reports bears out, to a certain extent, that conclusion still. A more accurate

conclusion today might be that means-tested legal aid plays a central, but diminishing,

role in facilitating access to justice for the impecunious. A right to legal aid is still, for

instance, protected by constitutional guarantees in a number of jurisdictions. Brazil, for

instance, provides such a guarantee in article 5 of its 1988 Constitution. Countries that

are signatory to the ECHR remain subject to the European Court of Human Right’s

decision in Airey v Ireland (1979) 2 EHRR 305, and its emphasis on the fundamental

importance of a right to legal aid as a means to secure effective access to justice before

the courts. Whether or not constitutional guarantees exist, the national reports disclose a

continuing approach to legal aid that sees it established and provided under various

legislative provisions; see, for instance, Canada, Israel and South Africa.

The national reports, bar two, highlight a common trend concerning legal aid:

that of legal aid provision remaining static, as in Uruguay, or in decline. The first

exception is that of Israel. It discloses a picture of growth rather than decline. Its legal

aid budget increased from 45 million NIS in 2000 to 78 million in 2010. Increasing

numbers of requests for legal aid assistance, and increasing grants of aid equally

complemented its increasing budget33

. Equally significantly recent reforms have seen

both the scope of legal aid widened and the eligibility criteria relaxed. As the Israeli

National Report puts it recent amendments have ‘increased the number of poor

applicants entitled to legal aid in the country, as the steady growing number of those

32

M. Cappelletti and B. Garth op. cit. at 4. 33

See Israeli National Report, infra.

John SORABJI (UK)


people consistently shows over the years.34

’ In the premises, it seems fairly safe to

conclude that there is no legal aid crisis in Israel.

The second exception is Korea. While its national report highlights a number of

drawbacks with its approach to legal aid cover it does, positively, draw attention to

recent growth in numbers taking up legal aid. The position appears to be that

historically low take-up rates of, specifically, civil legal aid for litigation funding, have

started to be overcome. This appears not to have arisen because individuals who were

previously eligible and were reticent about taking up funding or litigating per se, are

now more likely to litigate. The explanation for the increase in numbers seems to be an

expansion in coverage. In particular, there appears to have been an expansion to cover

debt and personal bankruptcy35

.

The growth of legal aid in Israel stands in marked contrast with the position in

other jurisdictions. In England and Wales, for instance, here has over the last twenty

years been a steady decline in legal aid provision. When legal aid was introduced in

1949 it was intended to ensure that ‘no one [would] be financially unable to prosecute a

just and reasonable claim or defend a legal right.36

’ From 80% of the population being

eligible for such aid in 1949, since 1998 eligibility has declined to 52% (1998), 46%

(2001) and 29% (2007)37

. Following further restrictions in terms of scope and eligibility

effected in 2013, the figure cannot but be significantly lower than 29%, although figures

are not yet available. Decline in scope and eligibility has, inevitably, been matched with

a reduction in the amount of public funds made available for legal aid: in 2008 the legal

aid budget stood at £2.1 billion, by 2013 it had been reduced to just over £2 billion,

albeit civil legal aid had undergone significant reduction so that of the total legal aid

budget i.e., excluding criminal legal aid, only £830 million was available for both civil

and family legal aid. By way of example, in 2013, legal aid for civil i.e., non-family law

civil, legal aid was reduced by 40% and stood at £157 million38

for a population in

England and Wales of 53.5 million. Early figures show that since 2013 there has been a

62% drop in civil cases that have been granted legal aid funding39

.

A similar picture can be seen in Ontario, Canada. Following three decades of

growth in legal aid cover from the mid-1960s provision was subject to a drastic

reduction in the mid-1990s; a point made by the Canadian National Report. By 2010, as

that report notes, the position was almost identical to the post-2013 situation in England

and Wales. As the report puts it,

34

Ibid. 35

See Korea National Report, infra. 36

Cited in S. Hynes & J. Robins, op. cit. at 70. 37

S. Hynes & J. Robins, op. cit. at 71. 38

See <http://www.lag.org.uk/media/147527/lcr_annex11.pdf> 39

Ministry of Justice Legal Aid Figures, June 2014 <http://static.guim.co.uk/sys-

images/Guardian/Pix/pictures/2014/9/3/1409762794943/Legalaidgraphic.jpg?guni=Article:in%20body%

20link>

http://www.lag.org.uk/media/147527/lcr_annex11.pdf

http://static.guim.co.uk/sys-images/Guardian/Pix/pictures/2014/9/3/1409762794943/Legalaidgraphic.jpg?guni=Article:in%20body%20link





‘The most recent coverage revision took place in April 2010, when certificate coverage

for all civil litigation matters, [with limited exceptions] was discontinued. By that time,

however, very few civil litigation matters were still being covered by LAO through the

certificate program and, as noted above, such coverage was restricted to funding for

disbursements.40

’

The rationale for this practical elimination of civil legal aid cover for litigation

was due to contingency fess agreements being rendered lawful. Hence legal aid as an

aspect of the welfare state was, again as in England and Wales, substituted with private

litigation funding arrangements.

A subtler picture of decline can arguably be discerned from the South African

National Report. It does not demonstrate active decline through a reduction in civil legal

aid, as is the case in Canada and England and Wales. South Africa’s legal aid fund has

since 2008 shown an increase from approximately 870 million Rand in 2008 to

approximately 1.15 billion Rand in 2012, with the figures being static since then41

.

While funding has remained steady, there has however been an increase in numbers

claiming legal aid; thus more are seeking aid from the same funding pot, thus putting it

under increasing pressure. More significantly, this is then married to the South African

Legal Aid agency’s (LASA) understanding that, notwithstanding this increase, demand

for its services outstrips its resources. In other words by standing still in terms of

funding and coverage, it could be said there has been a real terms decline; although this

conclusion is not itself drawn within the South African National Report.

A further issue is highlighted in the Brazilian National Report. As noted earlier

Brazil provides a constitutional guarantee that legal assistance will be made available.

In addition to this its constitution also provides a constitutional guarantee concerning

one mechanism through which this is to be achieved: the creation of a public defenders

office, the aim of which is to provide legal advice and representation to the impecunious.

In this it mirrors the position in Poland and Korea, where there is provision of state-

appointed lawyers as part of their legal aid provision (see section 7 below). The issue

arising here is that notwithstanding the constitutional guarantee, it has not been fully

implemented as yet either at federal or state-level in Brazil. The guarantee has not been

translated into practical reality.

The position concerning legal aid highlighted by the national reports, and taking

into account recent developments in England and Wales, is thus mixed. While legal aid

continues to play a central role in some jurisdictions, such as Israel, it is in marked

decline in others and real terms decline in others still. The rationale for its decline in

those jurisdictions appears to be twofold: first, explicitly, the adverse effect on national

budgets arising from the 2007 financial crisis, albeit this exacerbated a pre-existing

trend; and secondly, reforms that have made available privately-funded alternatives to

legal aid. Both mark a movement away from the idea that the state provides legal aid as

40

See Canada National Report, infra. 41

See South Africa National Report, infra.

John SORABJI (UK)


an aspect of the welfare state. The first reason sees legal aid reduction as one aspect of

an overall reduction in welfare provision: it is one instance of a general movement away

from the welfare state. The second reason sees the state move the basis of legal aid

provision from general taxation to the individual litigant; again an instance of a move

away from the welfare state to a more individualist approach.

The question that arises though is whether the trend highlighted by Canada and

England and Wales, and to a limited extent South Africa, is one that will become more

generalised across other jurisdictions. Constitutional, and similar, guarantees of access

to legal advice and representation, to lawyers where litigation arises or is necessary, can

– in principle and also in practice as demonstrated in Canada and England and Wales –

be fulfilled by the provision of contingency fee agreements, and equally, through the

provision of legal expenses insurance. Whether they should, or whether these

approaches are optimal is another question. Finally, before these alternatives to legal aid

are explored, the question can posed whether the alternatives might actually present a

more effective means of securing effective access to justice.

(4) Contingency Fees

The use of contingency fee funding is widespread. Of the national reports only

Korea’s suggests that they are not permitted in that jurisdiction, while Poland’s is

explicit on the fact that such agreements are impermissible, save to the extent that a

lawyer may enter into an agreement for a contingent fee payable in the event of success

in addition to their normal fees. Those jurisdictions, such as Canada, South Africa and

England and Wales where such agreements were at various times void at common law

as they offended the rules prohibiting champerty and maintenance, have enacted

statutory reforms legalising such agreements42

. Maintenance is ‘the procurement, by

direct or indirect financial assistance, of another person to institute, or carry on or

defend civil proceedings without lawful justification.’43

Champerty is aggravated

maintenance, as it secures for the maintainer ‘a share of the proceeds of the action or

suit or other contentious proceedings where property is in dispute.’44

Until 1966, in

England and Wales for instance, such agreements were criminal offences. They remain

void there on the ground that they are contrary to public policy45

. In addition to

legislative provisions which render such agreements lawful where they were previously

unlawful, other jurisdictions, as apparent from the national reports from Argentina,

Brazil, Uruguay and Israel regulate such funding agreements, and do so, variously,

through legislative provision and legal professional regulation. Even in jurisdictions,

such as England and Wales, Canada and South Africa, legislative regulation is

supplemented by regulation via legal professional conduct rules, which – in common

42

See Canada National Report, infra; South Africa National Report, infra. 43

Law Commission, Proposals for the reform of the Law Relating to Maintenance and (1966) 4; Hill v

Archbold [1968] 1 QB 686. 44

Cited and discussed in J. Sorabji & R. Musgrove, Litigation, cost, funding and the future, in The Civil

Procedure Rules Ten Years On (ed. Dwyer) (OUP) (2009) at 235ff. 45

Section 14(2) Criminal Law Act 1967; Trendtex Trading Corp v Credit Suisse [1982] AC 679 at 702.



with the other jurisdictions – seek to minimise, amongst other things, ethical problems

and conflicts of interest inherent in such agreements.

A number of different types of contingency fee agreement exist today. First, in

England and Wales, a form of contingency fee agreement, known as a conditional fee

agreement or CFA has been permitted since 1995, following the entry force of section

58 of the Courts and Legal Services Act 199046

. The explicit reason why these types of

agreement were introduced was to effect greater access to justice47

. With reductions in

the scope of legal aid, they were extended from their original limited scope of

application to be available in all forms of civil proceeding48

. As Sorabji & Musgrove

put it, ‘In this way the reduction in legal aid’s availability was justified and access to

justice to those who would not have qualified for such assistance would also be affected:

the CFA helped facilitate the State’s effective withdrawal from litigation funding and the

wider involvement of insurance companies’ involvement in its funding.’ CFAs operated

on the basis that lawyers would bill their clients as normal. These base costs would

however be supplemented by what was known as an uplift. The uplift would be

calculated as a percentage of the total base costs. The maximum potential uplift agreed

between lawyer and client was 100% of the base costs. In the event that the client’s

claim succeeded the base costs and uplift would be recoverable from the losing party

i.e., the losing party would have to pay both their own lawyer’s costs but also the

winning party’s base costs plus uplift, or in effect treble costs. In order to protect client’s

who entered into such agreements from the risk of having to pay the other side’s costs,

CFAs tended to be accompanied by the purchase of ATE insurance policies that covered

that risk: the cost of such policies was however recoverable from the other side in the

event that the party taking them out succeeded in the litigation.

The first generation of English and Welsh CFAs generated large scale technical,

satellite, litigation. This was due to the fact that if there was a defect in the agreement,

which would then render them unlawful – to be lawful they had to fully comply with the

legislative regime – a losing party who would otherwise have to pay the winner’s base

costs and uplift would be free of any obligation to pay those costs due to the operation

of what is known as the indemnity rule. Under the indemnity rule a losing party only

has to pay those of the winner’s costs that the winner is under a legal obligation to pay:

the loser must indemnify winner re. their costs. If there were to be no legal obligation

for the winner to pay their lawyer, which there would not be if the CFA was void, the

loser would have no obligation to pay any of the winner’s costs. Inevitably this gave

rise to heavily contested costs-only litigation. In addition to this, the manner in which

CFA uplifts were calculated lead to a burgeoning of lawyer-client costs, which in turn

increased the overall cost of litigation. Ultimately this led to CFAs being subject to

revision, first in 2005 to reduce the prospect of technical challenges through a

simplification in the statutory regime; and secondly in 2013 following the Jackson Cost

reforms, aimed at bringing their attendant costs down. Notwithstanding these reforms,

46

Conditional Fee Agreements Order 1995; the Conditional Fee Agreements Regulations 1995. 47

Hollins v Russell [2003] 1 WLR 2487 at [4]. 48

Conditional Fee Agreements Order 1998. For a discussion see J. Sorabji & R. Musgrove, Litigation,

cost, funding and the future, in The Civil Procedure Rules Ten Years On (ed. Dwyer) (OUP) (2009)

John SORABJI (UK)


the United Kingdom Supreme Court has recently suggested, and is awaiting argument

on the point, that the costs generated by CFAs may well amount to a breach of the

article 6 ECHR right to a fair trial49

. A scheme intended to increase access to the court,

may well ultimately be found to have had the opposite effect.

Similar schemes to the English CFA regime exist in other jurisdictions, such as

Brazil where flat or hourly-fee based contingency agreements are permissible. South

Africa, for instance, permits the entry into contingency funding agreements where

lawyers can charge an uplift in the event of success; that uplift being over and above

their normal contractual rate. This form of agreement, in common with the general trend,

is subject to strict regulation and is subject to a statutory maximum. As the South

African National Report notes, the maximum (and in this it is akin to the English and

Welsh approach) was 100% of the normal costs, while in money claims the cap was 25%

of the normal costs. Similar caps exist in, for instance, Canada, where they are

prescribed in the governing legislation. Moreover in Canada, the court retains a power

to scrutinise the fee payable under any contingency agreement, and may in an

appropriate case either reduce the amount payable or cancel the agreement in its

entirety50

.

In 2013 a second form of contingency fee agreement was introduced in England

and Wales. These agreements, known as damages-based agreements or DBAs, are a

variety of contingency agreement common to other jurisdictions. They are, for instance,

explicitly based on the form of contingency agreement used in Ontario, Canada. They

operate on a no-win, no-fee basis. The client agrees to pay their lawyer a percentage of

recovered damages in the event of success. In the event of success the client will still be

able to recover an amount from the losing party, that amount will be calculated by

reference to their lawyer’s normal hourly billing rates. As yet though this form of

contingency agreement has not been utilised to any real, if any, extent at all due to the

technical nature of the enacting legislation and uncertainty of the extent to which

agreements will be lawful within the scope of the legislation.

The English and Welsh and Canadian DBA is in essence a form of what it other

jurisdictions is known as a pure contingency fee agreement i.e., one not based on a flat

or hourly fee but rather as a percentage of the value of the claim. In Brazil, for instance,

such agreements are permissible subject to the requirement that the fee charged is

‘reasonable and [does] not deprive the client of the most substantial part of his or her

claim.51

’ As a general rule it appears that a fee of 30% of the sum recovered by the

client meets this requirement. Argentina operates a similar approach, albeit the fee is

subject to a legislative cap of 40% of the total value of the amount secured via a

judgment. Uruguay sets its maximum as 50% of the value of the claim. Israel operates a

similar system. It too sets fee maxima, albeit differential maxima are applied depending

on the stage at which a claim has reached in the event of settlement. Israel applies a

49

Coventry v. Lawrence [2014] UKSC 13. 50

See Canada National Report, infra. 51

See Brazil National Report, infra.



maximum cap akin to that found in Brazil and Argentina in claims concerning the

recognition of rights of Holocaust victims, where a maximum fee of 8% of the lawyer’s

total fee is set.

A third form of contingency agreement is also available; a partial contingency

agreement. Such agreements combine the traditional approach to funding i.e., the client

is obliged to pay their lawyer whatever the outcome of the litigation, with an additional

no-win no-fee contingency being paid in the event of success. Such partial or mixed

contingency agreements are found, for instance, in Uruguay.

Finally, it should be noted that there is a general consensus that there are no real

figures available showing how widely used contingency fee funding is. While, as in

South Africa, there is an understanding that their use has increased over the last decade,

and this would equally be the case in England and Wales and Canada where such

agreements have moved from being unlawful to lawful, figures on use are not available.

One further interesting feature that is common in England and Wales, but not reported

in the national reports, is the view that the introduction of such funding has lead to an

increase in spurious claims, that they have created a so-called compensation culture.

Rather than simply replacing legal aid as a means of funding meritorious claims, the

view amongst, the press and government is that these agreements have encouraged

unethical practices amongst lawyers and firms that seek out claims (claims management

firms or claims farmers), and has led to the development of an increasingly, and socially

regressive, litigious culture52

.

From the forgoing a number of provisional conclusions can be drawn regarding

contingency fee agreements:

(i) they are now widely available, even in jurisdictions that traditionally

rendered them unlawful;

(ii) they are available in a wide-range of civil actions, although individual

jurisdictions take differential approaches to the exact scope of application;

(iii) their increased use, at least in some jurisdictions, has been the result of a

reduction in legal aid cover;

(iv) they are, in all jurisdictions, subject to regulation;

(v) they can be divided into three distinct types: i) agreements where the

contingency fee is based on the value of the claim; ii) agreements where the

contingency is an uplift on the lawyer’s normal costs, with the contingency

either calculated as a percentage of the value of the claim or as a percentage

of the normal costs; iii) a combination of a normal costs agreement with an

additional contingency arising in the event of success;

52

See, for instance, J. Hand, The compensation culture: cliché or cause for concern?, Journal of Law and

Society, (2010) 37(4) 569; Compensation Culture, House of Commons, Constitutional Affairs Committee,

(Third Report of Session 2005–06) (HC 754–I).

John SORABJI (UK)


(vi) little, if any, evidence is available concerning how the use of such

agreements, and the extent to which they are an effective substitute for, or

complement to, legal aid provision; and

(vii) at least in England and Wales it is queried whether they do produce a

genuine increase in access to justice or whether, to the contrary, they have

produced an adverse increase in litigation costs that has both reduced access

to justice in individual cases and undermine the court’s ability to secure

access to justice generally.

In the light of the second two points, and particularly (vi) it is suggested that

empirical data concerning the use of such funding agreements would be beneficial, both

to secure a better understanding of who is using them, which types of claim they are

used for, and the extent to which they are used. Such study ought to then form the basis

of a detailed consideration of the extent to which such agreements can and do

complement legal aid funding, and perhaps more importantly, the extent to which they

can properly be expected to operate as a genuine and effective replacement for legal aid.

(5) The slow growth of third party funding

Third party funding covers two distinct concepts: (i) the purchase of a cause of

action or of rights arising from a judgment from the rights-holder; and (ii) the provision

of finance by a) a stranger to the litigation i.e., an individual, or corporate body

unconnected to the rights-holder; to b) the rights-holder. The stranger to the litigation

may provide the finance either for a price or altruistically. The term third party funding,

or professional funding, is generally confined to the situation where funding is provided

for a price. As McKillop and McCamus note, in the Canadian National report, the price

is generally a share in any damages awarded in the action or a share in any settlement.

There is a clear distinction between the two concepts. The former involves the

transfer of rights to a third party unconnected with the litigation. The funding does not

therefore enable the original rights-holder to bring an action to vindicate their rights.

The latter, through providing the rights-holder with finance, enables that individual to

bring proceedings to vindicate their rights. The latter, rather than the former, is thus

analogous to the provision of legal aid, contingency fee funding and LEI. In order to

distinguish the two concepts in the foregoing I confine the term ‘third party funding’ to

the latter, the former I refer to as ‘third party transfer’. The national reports demonstrate

a number of different approaches to third party transfer and funding. Taken together

they show that as an alternative to legal aid they remain in the infancy.

Third Party Transfer

Third party transfer appears to remain an exceptional mechanism. In England

and Wales, for instance, the transfer of a cause of action is impermissible as they

amount to maintenance and champerty. As the Court of Appeal affirmed in 2011 in

Simpson v Norfolk & Norwich University Hospital NHS Trust, having reviewed the

historical authorities,



‘. . . it is clear . . . that the law will not recognise on the grounds of public policy an

assignment of a bare right to litigate, that is, a right to litigate unsupported by an

interest of a kind sufficient to justify the assignee's pursuit of proceedings for his own

benefit. Moreover, . . . the assignment of a cause of action for the purposes of enabling

the assignee or a third party to make a profit out of the litigation will generally be void

as savouring of champerty.53

’

This general rule is however subject to a number of limited exceptions. Those

exceptions either have a statutory basis, i.e., those arising under insolvency law54

, or

where the assignor is viewed as having an interest in the outcome of the litigation. In

both cases, the rationale for the exception appears to be that the assignor is not a

genuine stranger to the litigation55

, but either through the assignment of a company’s

cause of action to an insolvency practitioner to enable the company’s assets to be

realised in the insolvency.

The basis for the public policy restriction on assignment of causes of action was,

historically, to ensure that the justice system did not become an instrument of abuse. It

was to ensure that individuals were not subjected to litigation brought by individuals

who had no real interest in rights-vindication, but simply wished, and had the means

and motive, to use the litigation as a means to oppress the defendant for ends

unconnected with it56

. Questions of effecting access to justice through the provision of

funding were not considered in the formulation of this aspect of public policy, neither

was the court’s ability to control abusive litigation through other mechanisms.

Only one of the national reports demonstrates the availability of third party

transfer: Brazil. None of the other national reports discuss the availability of this

mechanism. There are two potential reasons for this: first, that it was not considered to

fall within the scope of third party funding, as it was not and is not a means through an

individual can assert their rights; or secondly, that it is not permitted, either absolutely

or, as in England and Wales, generally. It is not possible to ascertain within the scope of

the present general report which is correct. It is however reasonable to assume that in

those jurisdictions, detailed below, where third party funding is prohibited that third

party transfer will also be prohibited: if strangers to litigation cannot fund it, it is

reasonable to assume that purchasing litigation via an assignment is viewed as the a

fortiori case.

The one national report that demonstrates that third party transfer is permissible

is Brazil. It is however not just permissible, but is more common than third party

funding. It occurs both in terms of the purchase of rights i.e., causes of action, but also

post-judgment i.e., the purchase of enforcement proceedings. The latter is more

53

Simpson v Norfolk & Norwich University Hospital NHS Trust [2011] EWCA Civ 1149, [2012] QB

640 at [15]. 54

Norglen Ltd v Reeds Rains Prudential Ltd [1999] 2 AC 1. 55

Re Oasis Merchandising Services Ltd [1995] 2 BCLC 493. 56

Giles v Thompson [1994] 1 AC 142 at 153.

John SORABJI (UK)


common, the former being ‘extremely rare57

’. This raises an interesting issue. Assuming,

for the sake of argument, that third party transfer can be properly viewed as a means to

promote access to the court process for those with rights in need of vindication – and

that is doubtful at best –, it can be questioned whether, on those terms, it does so in

Brazil. Given that the majority of instances of its use pertain to the purchase of a claim

post-commencement or issue or of post-judgment enforcement proceedings, its use

presupposes an ability on the part of individuals to bring claims in the first instance. As

such it could be said that it does not support access to justice in an analogous manner to

that which legal aid does. It does not, in practice, support claims being brought. One

answer to that arguable limitation is that access to justice goes beyond an ability to

facilitate claims being brought; it encompasses supporting claims to judgment and to, if

necessary, the enforcement of any judgment. As Bentham rightly noted justice’s direct

end – the aim of the civil justice system – encompasses both securing a correct decision

but also the effective enforcement of those decisions58

.

One substantive limitation that is apparent from the Brazilian National Report

concerns the nature of claims that are subject to third party transfer. The report

highlights the fact that the majority of such claims are purchased by banks or

investment funds, which generally take on larger value claims: lower or smaller value

claims being the province of contingency funding. As such it could be said, and in this a

comparison can be drawn with third party funding, it only facilitates access to justice for

a limited class of cases: those that have a commercial value for the funder. It does not,

as a consequence, support broader access to justice in the same way as legal aid. Where

it mirrors legal aid in that it is, in Brazil, available where a claim has merit, it does not

mirror it in terms of scope. Third party transfer, unlike legal aid, will only be available

where the claim has sufficient financial value to justify the investment. It is, and cannot

therefore, be a sufficient answer to any decline or reduction in legal aid. Given the

already noted limitation in terms of its availability until a claim has been commenced,

this additional limitation suggests third party transfer is, in Brazil – the one country in

which it is discussed as being readily available – not a realistic alternative to legal aid,

or even a sufficient complementary mechanism that can alleviate problems arising from

its reduction.

Third Party Funding

The national reports suggest the development of three broad approaches to third

party funding. The first appears to be that such funding remains impermissible. Korea,

for instance, appears not to permit such funding arrangements, as no details of such are

provided in its national report. Such an approach is definitively taken in Singapore,

57

See Brazil National Report, infra. 58

J. Bentham, The Works of Jeremy Bentham (ed. Bowring) (1843) (William Tait, Edinburgh) Vol. 9,

The Constitutional Code 25 – 26, ‘right decision and conformable execution . . . Decision is right, in so

far as, by giving execution and effect to it, the will expressed by the law is conformed to – the eventual

predictions delivered by the law, carried into effect.’



where such arrangements remain void under the continuing application of the common

law rules against champerty and maintenance59

.

The second development is one that can perhaps best be described as under-used

laissez-faire. Argentina, Brazil, Uruguay and Poland each exemplify this approach. In

each of these jurisdictions such agreements are permissible in principle, with little to no

regulation governing their operation. However they may come about they are matters of

private agreement between litigant and funder. Notwithstanding this however, such

agreements appear to be unusual; so unusual in the case of Uruguay, for example, and

Poland to a similar extent, that the existence of specific agreements is not a matter of

public knowledge. Of the jurisdictions that adopt this approach, the use of third party

funding is most common in Brazil, although as with the other jurisdictions there are no

available figures demonstrating the actual extent of their use. One interesting issue

arising in Brazil is the suggestion that the laissez-faire approach to regulation of such

agreements is subject to a practical limitation. Where such funding arrangements are

used in arbitration proceedings it is becoming apparent that procedural questions are

arising concerning potential conflicts of interest, presumably between funder and

funded, and concerning disclosure, again presumably of the fact and/or nature of the

agreement. While these concerns have not yet arisen in the context of litigation, they are

slowing the development of third party funding for arbitration. It is an open question

whether these issues will transfer to litigation funding, and will pose a procedural break

on the use and further development their use in that context.

The third approach is highlighted by the Canadian, Israeli and South African

national reports. It is one that sees such agreements subject to a marked degree of

regulation. This regulatory approach follows a liberalisation of approach, which has set

aside a previous prohibition on the use of such agreements. In this these national reports

are consistent with the approach taken in both Australian and England and Wales where

the rules against champerty and maintenance have been relaxed so that commercial

funding agreements are no longer void on public policy grounds60

.

The trend towards liberalisation in the majority of these jurisdictions, Israel

being the exception, has been court-based, rather than the consequence of specific

legislative reforms aimed at legitimising them, or subjecting them to regulation. In

Ontario, Canada, for instance, third party funding has been developed by the courts in

order, primarily, to facilitate the funding of class or multi-party litigation. (This focus on

it as a means of class action funding is also apparent in Israel, where such funding is

59

I am very grateful to Professor J. Prinsler, Singapore, for this information; and see Otech Pakistan Pvt

Ltd v Clough Engineering Ltd [2007] 1 SLR (R) 989, which affirms that champerty and maintenance, and

the public policy basis for them, applies to third party funding agreements in both litigation and

arbitration proceedings. It also illustrates a similar approach to exceptions where such agreements are

permissible as taken in England and Wales, as noted above. 60

For a discussion of these developments see, R. Mulheron & P. Cashman, Third-Party Funding of

Litigation: A Changing Landscape (2008) 27 CJQ 312. The leading cases on these developments are

Campbell Cash & Carry Pty Ltd v Fostif Pty Ltd [2006] HCA 41 and Arkin v Borchard Lines Ltd &

Others [2005] 1 WLR 3055.

John SORABJI (UK)


primarily made available from government funds on the basis that class actions are

proceedings that benefit the general public, and as such the party bringing the claim

should ‘be assisted from this public fund61

’.) In South Africa, as in Australia and

England and Wales, the courts, not the legislature, confirmed their legitimacy. As the

South African national report notes, it was a court-based development that found that

such agreements were not, now, contrary to public policy: PriceWaterHouse Coopers

Inc v National Potato Co-operative Ltd62

.

While these national reports illustrate a trend towards liberalisation following a

long period of prohibition, it is apparent, as the Israeli and Canadian national reports

highlight, that it is still in the early stages of development. Development is dependent

upon private enterprise being willing to invest in litigation for a return. In England and

Wales this market is in a state of what might be described as vigorous development with

investment firms such as Harbour Litigation Funding taking a very pro-active approach.

In Canada and Israel the market for such funders appears to be not as well-developed,

while South Africa has only one specific funding company and that only stared trading

in 201363

.

Two distinct operational approaches are taken to third party funding in these

jurisdictions. South Africa takes an approach akin to that seen in Argentina and Brazil:

the agreements are not subject to any regulation. Furthermore, the agreements operate

as a form of transfer of title or interest in the litigation from the claimant/plaintiff to the

funder. As such they operate as a form of third party transfer. The difference however

between these agreements and third party transfer per se, is that: i) the entire interest is

not necessarily transferred to the funder; and ii) whether the entire interest or a share in

the interest is transferred, the claimant/plaintiff remains the litigant albeit one under a

contractual agreement to permit the funder to control the litigation. Given these

characteristics it could be concluded that the South African approach is one that

conceptualises third party transfer and funding as being on a single spectrum, rather

than as distinct forms of funding agreement.

The second approach is that taken in Australia, England and Wales, Canada and

Israel. The agreements cannot shade into third party transfer, as, as in England and

Wales and Canada, the claimant/plaintiff is not permitted to yield control of the

litigation to the funder. The funder cannot, as in South Africa, control the litigation as a

consequence of providing funding. Moreover, in each of these jurisdictions the use of

such funding agreements is subject to a number of restrictions. In Israel, for instance,

61

See Israeli National Report, infra. The Canadian National Report, infra, also notes the existence, since

1992, of a similar funding body, which specialises funding class action litigation. 62

‘2004 (6) SA 66 (SCA) at para 46. In Price Waterhouse Coopers Inc v IMF (Australia) Ltd 2013 (6)

SA 217 (GNP) at 220E-G it was held that parties involved in litigation, in which another party is being

funded by an outsider, would be entitled to relief in the form of an order joining the funder to the

litigations, so that a direct order for costs can be obtained against it. Allowing such joinder would have

the beneficial effect of combating possible abuses arising from the recognition of the validity of

champertous contracts’ as per the South African National Report, infra. 63

The South African Legal Funding Company Ltd, see South Africa National Report, infra, for a

discussion.



lawyers are not permitted to act as funders for their own cases. In England and Wales

and Canada, specific funding agreements can be found to be void for reasons of

champerty i.e., the court retains a jurisdiction to control the use of such agreements

where they would, on their facts, be inimical to the public interest64

. Other such control

mechanisms as outlined in the Canadian National Report are:

‘Plaintiffs must obtain court approval to enter into a third party funding

agreement and the agreement must be promptly disclosed to the court;

The agreement must not compromise or impair either the lawyer-client relationship or

the lawyer’s professional judgement;

The right of the representative plaintiff to instruct and control the litigation must not be

diminished;

The court must be satisfied that the agreement is necessary to provide access to justice

to the plaintiff and the class members;

In seeking approval for a third party funding agreement, it is not necessary to have first

applied to the Class Proceedings Fund for funding. If, however, approval from the Fund

is sought and refused, nothing can be taken from the fact that the Class Proceedings

Fund was not prepared to provide litigation funding;

To be approved, the third party funding agreement must contain a term that the third

party funder is bound by the deemed undertaking and is also bound to keep confidential

any confidential or privileged information;

It is an acceptable term of a third party funding agreement to require the third party

funder to pay into court security for the defendant’s costs;

The court must be satisfied that the agreement is fair and reasonable.65

’

Similar control mechanisms exist in England and Wales.

Conclusion

The rationale behind the growth and in some jurisdictions introduction via court

decision of third party transfer and funding was best described by Lord Phillips MR in

Gulf Azov Shipping Co Ltd v Idisi [2004] EWCA Civ 92 at [54], where he said, ‘Public

policy now recognises that it is desirable, in order to facilitate access to justice, that

third parties should provide assistance designed to ensure those who are involved in

litigation have the benefit of legal representation.’ The express rationale in that case was

64

See Arkin v Borchard Lines Ltd & Others [2005] 1 WLR 3055; Bayens v. Kinross Gold Corporation,

2013 ONSC 4974 (CanLII) (Ont.S.C.J.) as discussed in the Canadian National Report, infra. 65

As per the Canadian National Report, infra, and Bayens v. Kinross Gold Corporation at [41].

John SORABJI (UK)


thus to enable individuals to properly prosecute their claims before the courts, to litigate

effectively.

Where third party funding is concerned this rationale is borne out. It is to a

degree questionable whether, and if so, to what extent third party transfer enables

individuals to gain effective access to justice. While it is right to say that through

transferring their claim for a price to a third party such individuals receive value for

their, contested, right, it is difficult to see how in fact it can be said that they have been

able to vindicate it or even how this allows them the opportunity to vindicate it. On the

contrary third party transfer seems to be more akin to a consensual settlement of a claim:

the rights-holder settles for less than the value of the right albeit with a third party rather

than the putative infringer of the right. The third party may ultimately vindicate the right

in litigation, but that is simply a means to a financial end and not the end in itself. It is

doubtful, at best, then whether this could properly be seen as an alternative to legal aid

funding of litigation. It is, it seems, an alternative to mediation.

In so far as third party funding itself is concerned, it can be seen as an alternative

to legal aid. That conclusion however is subject to, at least, two caveats. First, the

general position seems to be that it is an under-used alternative and one that remains in

the early stages of development. How effective it might be in the long term remains

therefore an open question. Secondly, its practical utility as an alternative seems limited,

as investors seeking to fund litigation will only do so where there is a reasonable chance

of a reasonable return. There will thus be a degree of cherry picking by funders. Claims

that would not yield such returns or which do not meet the funders’ success criteria will

not be funded. This, it might reasonably be thought, would and will leave a class of

potential litigant who would have been, in principle, eligible for legal aid unable to

secure third party funding. At best then, third party funding might be said to be a partial

alternative to legal aid.

(6) Legal Expenses Insurance

The use of legal expenses insurance as an additional means to finance the cost of

litigation is commonplace. Only one of the jurisdictions surveyed in the national reports

is stated as not having such insurance available: Uruguay. The applicability of such

insurance differs depending on jurisdiction. In Argentina, for instance, LEI is available

for claims in tort or delict, and is subject to a contractually defined cap66

. Similar

restrictions exist in Poland, where LEI contracts exclude cover for a wide-range of civil

disputes. Furthermore LEI has only recently become available in Poland. In Canada, by

way of contrast, it is available for a far wider range of civil actions e.g., contractual

disputes, employment disputes, property and taxation matters. The position in Israel is

similar, in that LEI is equally available for family law disputes and certain criminal

matters. Equally broad availability of such insurance is available in South Africa, Korea

and England and Wales.

66

See Argentina National Report, infra.



It is apparent that the most common means by which individuals obtain LEI is

not through standalone insurance policies, or through the purchase of after-the-event

(ATE) insurance policies (England and Wales appears to be alone in the promotion of

ATE policies, which is perhaps explained by its unique approach to contingency fee

funding via its CFAs). The majority of LEI funding arises through other insurance

policies: LEI is generally a subsidiary or optional addition to an insurance policy whose

primary purpose is something other than LEI. The most common forms of such

insurance are motor insurance or household insurance policies, which include LEI either

as a standard feature or as an optional extra. Israel and England and Wales provide

examples of jurisdictions where LEI is available as a standalone policy.

As a form of insurance, LEI is subject to the same form of regulation as other

forms of insurance; as, for instance, the Canadian national report shows insurance

providers are required to obtain an insurance licence from the relevant regulatory

authority prior to entering the market. Regulation is also, as in Brazil and South Africa,

subject to statutory control.

The national reports highlight a number of interesting features of LEI. First, they

demonstrate that LEI can be used to cover a wide-range of legal provision. It does not

simply cover funding for lawyers carrying out pre-trial work or trial work. It can be

used to cover court fees, witness expenses, drafting legal documents, legal advice,

provided through, for instance, the availability of legal advice hotlines, as well as legal

representation in court; for the breadth of such scope, see for instance, the Israeli and

South African National Reports. It can also be used to cover expenses arising from or

connected to mediated settlements: the cover does not simply relate to litigation cover.

As such, in principle, it could cover as wide, and potentially a wider, scope of legal

expenses than legal aid.

Secondly, it is apparent that the take-up and use of LEI is low. This is in stark

contrast to Germany and Sweden, for instance, where – as Follett notes – LEI is the

primary means by which individuals fund litigation: it is ‘the predominant method of

legal aid delivery where citizens purchase an insurance policy which covers a range of

legal matters before or after they occur.67

’ In Quebec, Canada only 10% of the

population have LEI cover, and – as the Canadian National Report shows, this is despite

an express, targeted, advertising campaign aimed at improving LEI take-up rates. The

position in the rest of Canada is lower. Take-up rates in Poland are even lower: only 1%

of the population have LEI. South Africa sits in the middle-range, with approximately 6%

of the population having LEI68

.

Thirdly, there is a commonality in rationale why there is a low take-up rate. One

explanation given regarding this is that individuals simply do not believe that, as a form

67

L. Follett, op. cit. at 5. 68

South Africa National Report, infra, 3.2 million individuals have such policies, from a population of

approximately 52 million.

John SORABJI (UK)


of insurance, it is one that they need to take out. As the Canadian National Report

highlights, ‘unlike medical expenses, people do not usually expect to incur legal costs.’

It is viewed as an unnecessary expense. A similar point is made in the Korean National

Report, where it is reported that individuals are unwilling to take out such insurance

because they do not believe that ‘it is possible for them to get into any lawsuit during

their lifetime.’ This is perhaps borne out by the evidence from South Africa, which

records that the claims ratios for LEI are ‘significantly lower than the average claims

ratio for the [comparable short-term insurance] industry as a whole’. Lower by the

following ratios: 9 – 10% against 63%.

A further reason given for low uptake is highlighted in the South African

National report: resistance, even if passive resistance, by the legal profession. The point

made is that the legal profession has not, itself, taken a lead in promoting the use of

such policies as a means to ‘enhance access to justice.’ This can be contrasted with the

position in England and Wales where, as a means to promote the use of CFA

contingency funding agreements, the legal profession was active in promoting the use of

ATE-insurance policies. I might be said at this point that such promotion was not

necessarily focused on promoting access to justice in a purely altruistic sense, but in

promoting the uptake of funding agreements as a means to maximise the amount of

work the individual lawyer had on his or her books. Promoting access to justice could

be said to arise as a product of enlightened self-interest on the part of the profession.

Finally, the low take-up rates stand in stark contrast to the apparent weight that

policy-makers in the various jurisdictions place on LEI. In Canada, for instance, LEI

has been highlighted as ‘an important tool for helping Canadians access legal

assistance.’ So important is it understood to be in this regard that a target has been set

‘for 75% of middle income Canadians to have legal insurance by 2030.69

’ Equally, the

Korea National Report highlights LEI as an area ripe for promotion. This leads to a

broader point for consideration.

LEI, on the evidence of the National Reports – is to a degree an inexpensive

form of insurance. It is one with a relatively low utilisation rate: it is unusual for claims

to be made under it. This is understandable most people do not become involved in

litigation, and most do not need to consider bringing proceedings. In this regard it is

unsurprising that there is a degree of resistance to the take-up of LEI in Canada and

Korea. As an inexpensive form of insurance it is however one that could be utilised to

provide effective funding for individuals who would otherwise be within the scope of

legal aid, as well as those – as in Canada – whose income would take them outside

scope. Given this might LEI form the basis of a comprehensive, market-based,

replacement for legal aid?

The argument might be developed, for instance, that if Philip Bobbitt is correct

and the welfare state is giving way to a market state, and as such the state simply is

required to put in place structures which provide opportunity and choice for citizens

69

See Canada National Report, infra.



rather than providing them with defined welfare benefits, such as legal aid, then LEI is

an option entirely consistent with it70

. If this is correct, and even if it is only arguable, a

number of steps could be taken by national governments to ensure LEI is an adequate,

comprehensive replacement for legal aid. First, governments could require employers to

provide auto-enrolment into defined LEI schemes. Individuals could then have a choice:

do nothing and be subject to auto-enrolment into a default scheme at minimum price, or

choose to enrol into other available schemes of comparable price, higher price and with

differing coverage options, subject to minimum mandatory coverage. LEI as a form of

Legalcare akin to Obamacare might thus be an option.

Secondly, individuals could opt-out of this form of enrolment if they already had

in place such cover through existing motor or household insurance policies: regulation

could require such policies to provide, as a minimum, the equivalent level of provision

secured under the employment auto-enrolment option. The ability to opt-out of cover

entirely might be limited and subject to a reverse means-test i.e., only those citizens

whose income or assets are over a certain financial threshold could opt-out of LEI cover.

Thirdly, where individuals did not fall within either of the first two categories, and did

not come under the cover provided by policies available under those categories, the

state could fund policy premiums for those in receipt of welfare benefits. In this way,

government policy could realise the aim, as set out in the Canadian National Report, of

securing policy cover for a large percentage of the population and, arguably, do so to a

greater extent than legal aid cover can now be made available. Whatever the ultimate

merits, given the decline in legal aid cover, it seems an option worth, at the least,

exploring.

(7) Other approaches

A number of reports highlighted additional measures that are being taken. These

focus on court-appointment of lawyers, the exemption from court fees, the promotion of

mediation and on the encouragement of pro bono activity by lawyers.

Court-Appointed Lawyers

The provision of court-appointed legal representatives is one of the two main

mechanisms through which legal aid is provided in Poland; the other fee exemption is

detailed below. Similar schemes exist in, for instance, Korea in regard of representation

in criminal proceedings. A similar, albeit more limited, power exists in England and

Wales, whereby the court can recommend that the legal aid authorities provide funding

for an individual who, in its view, requires legal representation. The court has, however,

no power to direct the appointment of a lawyer by the legal aid authorities. The Polish

provision is one that enables the court to order representative be permitted on an ex

gratia basis. That being said, in Poland, the court’s power does not extend to exempting

70

For a discussion see: J. Sorabji, Justice in a Market State – An English Prolegomenon, (to be published

2014).

John SORABJI (UK)


the individual concerned from any obligation that may arise to pay the opposing party’s

legal costs. Given this, it might be said to provide a limited cure: an impecunious

individual may still be persuaded not to litigate or defend a valid claim through fear of

adverse costs, notwithstanding the provision of a court-appointed lawyer to represent

them.

Fee Exemption

Fee exemption is considered in the Polish National Report. It arises in two ways.

First, individual litigants can receive such assistance, under statute, through exemption

from otherwise applicable requirements to pay court costs i.e., otherwise mandatory

fees for issuing claims. It applies irrespective of an individual’s financial

circumstances71

to specific categories of civil claim e.g., consumer protection claims,

social security claims. This statute based non-means tested approach is supplemented by

judicial power to dispense with court fees in specific proceedings. This further measure

is exercised on a means-tested basis, meaning that Poland operates a financial

exemption to court fees akin to the statutory-based fee exemption scheme in place in

England and Wales.

Mediation

Turning to mediation, in South Africa, for instance, since August 2013 court-

annexed mediation has been in place. This aims to provide access to justice, and this

must refer to access to justice in the broader sense rather than in the sense of access to

an adjudicatory process, to the poor. It is a consent-based system, and one that it is

reported as being not-inexpensive. As such it has to be, and is queried by the national

reporters, whether it is a realistic replacement (or even complementary mechanism) for

legal aid. Whatever the success or otherwise of schemes such as this while they clearly

support the provision of access to justice in terms of dispute resolution, it cannot

properly be said that they further an impecunious individual’s ability to gain access to a

formal adjudicatory process and through that rights-vindication. As an alternative to

legal aid, it can be queried if such schemes are an alternative that seeks to

institutionalise the replacement of legal aid as a means of rights-vindication with a

mechanism that diverts the impecunious from the courts. As such it must be questioned

whether, and to what extent, they are consistent with a commitment to equality before

the law and equal access to the law.

Pro Bono Assistance

In addition to the promotion of mediation, the Korean national report highlights

a further alternative, one that can be said to promote access to rights-vindication: the

increased use of pro bono legal advice and assistance by the legal profession. In Korea

lawyers are under a statutory obligation to carry out a minimum of thirty hours of

71

See Poland National Report, infra, Exemption From Court Costs.



‘public interest activities72

’ per year. This is not however limited to legal aid. It can also

encompass participating in the legislative process, and as such could arguably seek to

improve access to justice in a broad sense through helping to ensure that laws are

drafted in as straightforward and accessible manner as possible. A similar system is in

place in South Africa, where the law societies and bar councils prescribe a minimum

number of pro bono working hours per year. These hours are mandatory practising

requirements. The ability of individuals to obtain effective pro bono assistance in South

Africa is facilitated by ProBono.Org, an established registered law clinic, which acts as

a clearinghouse for pro bono cases matching strong claims with available lawyers.

A further alternative mechanism is the provision of legal help by university law

centres or clinics. Such an approach, common in the United States and to a lesser extent

in England and Wales, is highlighted in the South African National Report, and also

within the Uruguay National Report. The South African National Report highlights two

pertinent features of this form of support. In the first instance, it developed as a means

through which law students could provide, supervised, pro bono advice and assistance

to impecunious litigants. Secondly, these centres developed into ‘statutorily recognised

legal aid providers, staffed by attorneys and candidate attorneys and assisted by

students. . .73

’ The centres became, in other words, university-based legal aid centres, in

which trainee lawyers can fulfil their vocational training requirements. As the South

African report notes, the result of this was to create ‘a critical key to access to the legal

profession as well as increased representation of clients . . .74

’.

The promotion of pro bono assistance to individuals who cannot afford legal

representation has also been a focus of reform in England and Wales. While there is no

statutory or professional obligation to carry out such activities, following the reduction

in legal aid there in 2013 the judiciary and the professional bodies (the Bar Council and

the Law Society) have worked to devise and promote pro bono legal advice, assistance

and representation schemes. Schemes such as the Chancery Litigant-in-Person75

scheme, for instance, seek to ensure that barristers are available outside court to provide

pro bono advice and where appropriate representation in court for litigants-in-person76

.

Additionally, a number of self-help manuals aimed at guiding litigants-in-person

through the pre-trial and trial process have been produced77

. Perhaps, most radically,

consideration is being given to revising the English and Welsh civil justice system’s

traditional commitment to an adversarial form of process in favour of one that adopted

more inquisitorial techniques where one or more litigants in a set of proceedings were

without legal representation78

. While this idea is in its infancy, the broad idea is to

72

See Korea National Report, infra. 73

South Africa National Report, infra. 74

Ibid. 75

A Litigant-in-person being an individual who brings a case before the courts without the assistance of a

lawyer. 76

http://www.chba.org.uk/about-us/the-association/clips-chancery-bar-litigant-in-person-support-scheme. 77

See, for instance, A Guide to Bringing and Defending a Small Claim (Civil Justice Council) (April

2013) 78

The Judicial Working Group on Litigants in Person: Report (Judicial Office) (July 2013) at 31.

http://www.chba.org.uk/about-us/the-association/clips-chancery-bar-litigant-in-person-support-scheme

John SORABJI (UK)


enable the court to enter the arena of fact-finding in a way not previously permitted

under the common law adversarial system. This would enable, and in some cases

require, the judge rather than the parties to examine witnesses.

Alternative State Funding

While this alternative is in its infancy, a further alternative to legal aid provision

has recently been identified in England and Wales, albeit at the present time it is

confined to family law proceedings. This alternative is one that enables the court to

direct the court service to pay for legal representation for a party who would otherwise

be unable to afford it. The basis of this power was discovered by the High Court in a

statutory rule-making power that was introduced for other purposes in April 2013, and

was broadly held to be analogous to the court’s well-established power to direct the

court service to pay for a translator for a litigant who would not otherwise be able to

understand the proceedings on the basis that they cannot understand English79

. It

remains, at the time of writing, an open question whether this development will be

subject to appellate scrutiny. What can be said at this time however is that it could be

characterised as an instance of the courts seeking to replace legal aid funding, as a last

resort, with another form of funding from public funds. A variation on this approach is

in place in Poland, and is well established there. Its Code of Civil Procedure provides a

facility for individuals to apply for a court-appointed legal representative, where such an

appointment is necessary in the interests of justice i.e., where it is necessary to enable

effective rights-protection and the individual cannot afford to pay the relevant legal

costs.

Non-Lawyer Litigant Support

Finally, one further alternative is being pursued. Individual litigants in England

and Wales have always been able, as of right, to have the assistance in court of non-

lawyers, who are able to provide them with moral support. Over the last twenty years,

these lay helpers or supporters – known as McKenzie Friends – have also been afforded,

on a case-by-case basis the right to address the court. They have been authorised, in the

context, of individual litigation to act as court-authorised lay advocates80

. In early 2013

it was suggested by the Legal Services Consumer Panel, an advisory body, that the

courts should take a more liberal approach to the use of such individuals, that they

should more readily grant them rights of audience and more readily accept that they can

charge the litigant for their services81

. Whether and if so how this suggestion might be

acted on by either the government, courts or legal services regulators is unclear,

however it must be questioned whether the idea that unqualified individuals, subject to

no regulation, ought to be promoted as a promote alternative to the provision of

qualified lawyers. It might be queried whether the suggestion is one that seeks to

79

Q v Q [2014] EWFC 31 80

For a summary of the law concerning the use of such lay helpers see: Practice Guidance (McKenzie

Friends: Civil and Family Courts) [2010] 1 WLR 1881. 81

Report: Fee-Charging McKenzie Friends (Legal Services Consumer Panel) (April 2014).



promote ‘second class’ justice for those who cannot otherwise afford legal

representation, and thereby institutionalises, on the grounds that something is better

than nothing, unequal access to justice. As a response to a reduction in legal aid

provision it is one that poses more questions than answers.

(8) Conclusion

This paper has highlighted the approach to legal aid and a number of alternatives

to it in a variety of different jurisdictions from around the world. It is not intended to be

exhaustive. It provides an overview. That overview has shown that each of the

jurisdictions are grappling, to varying degrees, with a similar range of alternative

approaches to state-funded legal aid, whether they are contingency funding, legal

expenses insurance, third party transfer or funding, or mediation, pro bono support etc.,

while to differing degrees maintaining a commitment to the provision of legal aid. In

some jurisdictions the alternatives complement legal aid, in others they are explicitly

being developed and promoted as substitutes for it. What no state appears to be doing is,

as the South African national report suggests ought to be the position there: leading by

example. As the South African reporters put it,

‘Undoubtedly, the state is not leading by example, as it constitutionally should, and it is

not expected that the persons in need of legal aid will, in the foreseeable future, each

have their day in court on an equal basis with those who can fund litigation themselves.’

In 1946, in England and Wales, the Rushcliffe Committee was, in the words of

Elson, required to consider a simple question: as a country do we ‘go on as we have in

the past or [do we] . . . grapple realistically with the problem in an attempt to solve it

on a comprehensive and ambitious basis?82

’ The South African, Korean and Polish

national reports, and they are not alone, make it clear that such a question is not

currently being grappled with in their jurisdictions. The same cannot but be the case

elsewhere. It appears, based on what can be seen in the national reports and this general

report, reasonable to conclude that we are once again faced with the same problem and

the same question. Is it sufficient to continue to develop alternatives to legal aid on a

piecemeal basis, or ought we to develop what might be termed, following Cappelletti, a

fourth wave of access to justice; one that grapples with the question whether and how

we produce a coherent system of litigation funding that will help to secure equal access

to rights-vindication, and to mediation services, for all. This might require us to think

beyond legal aid, to think beyond the welfare state. It might not. Whatever solutions we

come up with however, the properly important step will be to ask the question and start

to consider what the answer might be so that we too can attempt to solve the funding

conundrum on a ‘comprehensive and ambitious basis.’

82

A. Elson, The Rushcliffe Report, (1946) U Chi Law Rev (13) (2) 131 at 142, as discussed in D.

Neuberger, Keynote Address, (The Law Society & Bar Council Opening of the Legal Year Seminar,

London) (30 September 2009)

<http://www.lag.org.uk/media/68031/master_of_the_rolls_keynote_address.pdf>.

http://www.lag.org.uk/media/68031/master_of_the_rolls_keynote_address.pdf

John SORABJI (UK)


ANNEX A: NATIONAL REPORTERS

Argentina: Dr. Francisco Verbic (Coordinador Ejecutivo de la Maestría en Derecho

Procesal at Facultad de Ciencias Jurídicas y Sociales de la UNLP)

Brazil: Professor Eduardo Talamini (Federal University of Paraná, partner at Justen,

Pereira, Oliveira & Talamini), Dr César A. Guimarães Pereira (attorney at Justen,

Pereira, Oliveira & Talamini, Professor Teresa Arruda Alvim Wambier (Catholic

University of São Paolo, Brazil)

Canada: Mr David McKillop (Senior Vice-President, Legal Aid, Ontario), Professor

John McCamus (Chairman of the Board and CEO of Legal Aid Ontario)

Israel: Professor Michael Karayanni (The Hebrew University of Jerusalem), Assaf

Tabacka (doctoral student, The Hebrew University of Jerusalem)

Korea: Dr E.H. (Eun Hyeon) Kang (Attorney at Law, member of theKorean Bar)

Poland: Professor Kinga Flaga-Gieruszynska (Szczecin University)

South Africa: Prof Dr Danie van Loggerenberg SC (Extraordinary Professor of Law,

University of Pretoria, Pretoria; member of the Pretoria Bar) and Mr F Haupt (Director:

Legal Aid Clinic, University of Pretoria, Pretoria; attorney).

Uruguay: Dr Santiago Pereira Campos (Senior Partner, Rueda Abadi Pereira)



ANNEX B: QUESTIONNAIRE

Legal Aid

1. Is legal aid available to litigants in your jurisdiction? If so, is it available to all civil

claims or only some claims. If it is limited to some claims only e.g., contractual

disputes, tortious or delict claims etc, to which is it limited?

2. Has the coverage provided by legal aid been subject to revision? If so when has it

been most recently revised? What was the nature and extent of the revision? By way

of example, legal aid in England and Wales originally covered 80% of the

population, by 2008 it only covered 29% of the population and has recently been

further reduced. Equally, and again by way of example, legal aid used to cover

personal injury claims in England and Wales, such coverage was abolished in 1999.

Has there been a similar reduction in coverage and scope of legal aid in your

jurisdiction?

Legal Expenses Insurance

3. Is legal expenses insurance (LEI) available in your jurisdiction? If so, to what extent

is it available? What types of civil claim are funded by LEI? If figures are available,

what percentage of civil claims is funded by way of LEI? Has that figure altered

over the last decade? If so by what extent?

Contingency Fee Agreements

4. Are contingency fee agreements available in your jurisdiction? If so, for what type

of civil claims are they available? If so are they regulated? If, they are regulated

how are they regulated and what is the nature of the regulation?

5. Could you describe the process by which such agreements operate?

6. If figures are available, what percentage of civil claims is funded by way of

contingency fee agreement? Has that figure altered over the last decade? If so by

what extent?

Third Party Funding

7. Is third party funding of litigation permitted in your jurisdiction? If so, for what type

of claims is it available?

8. Could you describe the process by which such agreements operate?

9. If figures are available, what percentage of civil claims is funded by way of third

party funding? Has that figure altered over the last decade? If so by what extent?

Francisco Verbic (Argentina)


Francisco Verbic

Argentina

Legal Aid

Argentina is a federal country, whose federal state coexists with 23 local states

called Provinces and with the City of Buenos Aires, which has a very particular juridical

status already recognized by the SCJ. Federal Government’s powers are only those

which had been delegated by local states. The political system assumes that

everything not expressly delegated remains in hands of the latter.

As far as we are concerned for the analysis that follows, we should take into

account that art. 5 of the Argentine Federal Constitution establishes -as a condition for

recognizing the autonomy of the Provinces- that they must organize their own justice

administration system, a task that includes the enactment of procedural regulations.

This analysis is focus on the federal system of civil procedure.

Within this field, there is public legal aid available for those persons who cannot

afford the costs of litigation. It doesn’t matter what sort of civil claim they intend to

assert because there are no limitations in this regard. The only legal requisite is a lack of

money (that the litigant must demonstrate) to afford a private lawyer.

The system of legal aid in Argentina is a public one, mainly provided by the

Defense Public Ministry (Ministerio Público de la Defensa), which is one of the areas

of the Public Ministry. The whole regime of this constitutional organism (art. 120 of

Argentine Federal Constitution) has been regulated by Act N° 24.946 (enacted in 1998)

and Presidential Decree N° 300/98. The law was revised in 2004 by Act N° 25.909,

even though this reform did not modified anything related to legal aid. Besides the

Defense Public Ministry, local lawyer’s professional organizations also provide for legal

aid to those who need it. The only requisite, once again, is the lack of resources to

afford a private lawyer.

It should be underlined that the system does not provide for money, but for

professional advice and trial representation. Both within the Defense Public Ministry

and the Professional Lawyer’s Organizations systems, lawyers must work completely

free for their clients once they demonstrate the lack of resources to afford their private

counsel.


The Insurance Act N° 17.418 provides in its art. 110 for a “Civil responsibility

insurance” (tort insurance). This insurance covers the payment of legal expenses

produced both before and during judicial cases on civil responsibility (torts), subject to



a cap which is defined by the particular contract and its costs. There are no statistics

available to know what percentage of civil claims are funded in this way


In Argentina every litigant can reach a contingency fee agreement with her

lawyer. At the federal level this is regulated by the Lawyer’s Fees Act N° 21.839, which

art. 4 allow lawyers to contract with their clients that her fees will consist on a

participation of the results on one or more cases.

This legal provision establishes a 40% cap of the whole obtained result. It also

provides that when lawyer and client enter into a contract defining a professional fee

over 20% of the result, the lawyer must pay its client s judicial expenses if she loose the

case (except for the situation where they enter into another specific contract establishing

otherwise).

Fee arrangements are allowed in any kind of situations, except for social security,

maintenance and family law cases (art. 4, last paragraph).

The process is quite simple. The client signs a contract with her lawyer

determining the fee percentage before the case begin. Once the case is finished, usually

the client collects his money and pays her lawyer privately. However, sometimes the

lawyer files the contract before the court and asks for the money to be pay directly to

her. There are some restrictions in certain areas, like labour law, where lawyers should

file the contract before the court and ask for an approval (even though it’s quite

common that the client pays her lawyer privately, without the need of that judicial

approval).

As far as I’m concerned, there are no available statistics or empirical studies

regarding this issue.

Third Party Funding

Even though there are no legal provisions regarding this issue, there are no legal

restrictions on third party funding in Argentina. So, as a matter of principle, it’s allowed

for every kind of cases. It’s not a common practice though and there are no theoretical

or empirical studies on the issue. Personally, in 12 years of litigation, I have never

entered into this sort of contracts. There are no statistics available on this topic.

César A. Guimarães Pereira

Teresa Arruda Alvim Wambier

NATIONAL REPORT – BRAZIL

César A. Guimarães PEREIRA and Teresa Arruda Alvim WAMBIER (Brazil)


Eduardo Talamini

Legal Aid

The Brazilian Constitution enacted in 1988 provides for the guarantee of “full

legal assistance” to those who prove insufficiency of means (article 5, LXXIV). By

referring to “legal assistance” instead of “judicial assistance”, which was the phrase

used in previous Constitutions, the constitutional provision extended this guarantee to

any and all legal assistance that those economically less favored may need, even outside

judicial proceedings. Moreover, the “assistance” was expressly qualified as “full”: it

must comprehend any and all substantive cost that may be a requisite or an obstacle to

the exercise of one’s rights. Within court proceedings, the guarantee includes the

“benefit of free Justice” (exemption from court costs and expenses and payment by the

state of costs owed to third parties, such as experts) and legal assistance per se (right to

receive advice and representation by an attorney at no cost).

The benefit of free Justice is granted in accordance with legislation prior to the

current Constitution (Law 1.060, of 1950): the list of costs and expenses encompassed

by the benefit mentioned in the law does not include many of the fees currently charged

for the exercise of rights in court. For instance, the Brazilian Federal Supreme Court has

established that the expenses involved in DNA exams for paternity determination must

be covered by the state if the party requesting it does not have the means to pay for it

(RE 224.775-MS, 2a T., v.u., rel. Min. Néri da Silveira, j. 08.04.2002, DJU 24.05.2002.

Meanwhile, Law 10.317 of 2001 changed Law 1.060 precisely to provide for this

situation). As for the beneficiary, this guarantee is directed to individuals, not to legal

entities or corporations. However, case law has extended it to nonprofit legal entities

which are devoid of the means to cover judicial costs. In any case, an individual will be

able to enjoy the benefits of legal assistance upon a mere statement that he does not

have the means to pay for the legal costs and (or) attorney’s fees without jeopardy to the

individual himself or his Family (in accordance with a change in Law 1.060 made by

Law 7.510, of 1986). The court will deny or revoke such benefits if it obtains proof to

the contrary, brought by the opposing party or gathered sponte sua. It will also apply

monetary penalties on the party which has unduly sought the benefit. With regard to the

right to be assisted by an attorney at no cost, there is a significant gap between the

constitutional rule and actual reality.

The Constitution also provides that both the federal and state governments

should create an agency (Public Defenders Office) with the specific task of providing

legal advice and representation at any level of those in need (article 134). The federal

Public Defenders Office is not yet sufficiently organized, and it still does not have

representation in many of the federal court divisions. On the other hand, many states

have not yet formed their state Public Defenders Offices or have not given them

sufficient means. To fill at least in part this gap, other solutions are adopted, such as

agreements between the government and bar association and; assignment to other, more

organized public agencies of tasks originally under Public Defenders Office

responsibility.



There has been no recent revision of the extension of full legal assistance and

there is no perspective for any changes in the recent future.


LEI is available and admissible. This type of insurance is sometimes included as

an accessory coverage in insurance policies with another main purpose, such as vehicle

insurance or insurance for actions made by employees. However, it is not yet a

widespread practice as a main purpose of an insurance policy. We are not aware of any

statistics concerning this topic. There have been no changes in the past 10 years.


Parties and counsel are allowed to agree on contingency fee arrangements.

These can be either pure contingency arrangements or systems that combine flat or

hourly fees with a success fee. In legal practice, pure contingency fee agreements are

common in labour relations matters, property condemnation suits and consumer cases.

In corporate cases, a combined arrangement or a non-contingency system are more

usual. Contingency fees are regulated by the legal profession regulatory body (Order of

Advocates, or OAB, in the Portuguese acronym), based on a 1994 statute and secondary

regulation (Law 8.906, of 1994), including an advocates’ code of ethics. They are

expected to be reasonable and not deprive the client of the most substantial part of his or

her claim. In pure contingency fee agreements, a 30% fee is considered reasonable. A

special feature of Brazilian legal profession regulation is the direct entitlement of

counsel to court-ordered attorney’s fees. In accordance with Law 8.906, of 1994, court-

ordered attorneys’ fees payable by the defeated opposite party are the property of

counsel, not of his or her client. Pursuant to articles 20, §§ 3 and 4, of the Brazilian

Civil Procedure Code (CPC), such fees can be awarded in a flat amount or as a

percentage (typically 10% to 20%) of the amount of a money judgment or of the

estimated amount of the dispute. Although clients and counsel can contract around this

provision and assign these fees to the clients (cf. STF, ADI 1194, Plenary, rel. Min.

CARMEN LUCIA, j. 20.05.2009, DJe 10.09.2009), general practice is that these fees

remain with counsel. In certain cases such court-ordered fees represent all or a large

portion of counsel’s remuneration for providing litigation services. Court-ordered

attorney’s fees must be set in all civil cases except in a few situations in which the law

intends the parties not to bear additional risks to access courts. A few examples of cases

without court-ordered fees are labor relations claims (in which this exemption is granted

only in favour of the plaintiff), remedies to protect certain fundamental civil rights and

citizen suits.

The general mechanism by which they operate is a fees agreement between the

client and counsel arranging a pure or partial contingency fee and affirming counsel’s

exclusive entitlement to any court-ordered attorney’s fees. If no agreement is made, by

César A. Guimarães PEREIRA and Teresa Arruda Alvim WAMBIER (Brazil)


default counsel is entitled to court-ordered attorney’s fees, which are contingency-

related. Law 8.906, of 1994, provides for this exclusive entitlement in case the client

and counsel do not contract around it.

To our knowledge, there are no statistics about figures involving contingency fee

agreements.

Third Party Funding

Third party funding of litigation is permitted. It is available in large civil claims,

even though the market for such funding is still under development and its use is not

widespread. A Porto Alegre-based practitioner and law professor described this as a

middle-market speculative practice that has not yet reached the international level of

professionalism. A São Paulo-based auditor has mentioned GáveaJus as the largest and

most sophisticated investment fund in this field, and alongside BTG-Pactual and Bank

of America it is described as professional players. These and other banks and

investment funds offer funding for claims against private parties and claims against

government entities. A party can obtain funding for new or pending suits, and well as

for the enforcement of an existing judgment. The most common format is a purchase of

rights arising out of judgments that are ready for enforcement, in which case the

purchaser generally takes control of the proceedings. Funding for cases still to be

commenced is extremely rare, but it is relatively common for funds to purchase claims

or a part of a claim before a judgment is made. Such investment funds are regulated by

the securities regulator (CVM, in the Portuguese acronym) under the title of

“investment funds on non-standard credit rights”. More recently, third party funding is

becoming more common in arbitration as well. A leading Sao Paulo law firm has

reported having had to date four arbitration cases in Brazil with third party funding and

being currently involved in another one. In arbitration, issues concerning disclosure and

potential conflicts create uncertainty about how to move forward with third party

funding. Such procedural concerns have not created difficulties in third party funding of

litigation so far.

The most common mechanism through which such funding operates is the

purchase of all or part of a claim by a bank or an investment fund. Certain investment

houses offer investment funds based on purchase of claims. They invest the funds thus

obtained from the general public by funding litigation. GáveaJus, a Rio de Janeiro-

based investment fund manager, offers funding by purchasing judgments that are in the

enforcement stage or claims in a pre-judgment stage. Such purchases are based on an

analysis of the merits of the case (in a pre-judgment stage) and the solvability of the

party owing or potentially owing the judgment, as well as the time in which payment of

the judgment is to be expected. In smaller or specific cases, such as those involving

labor relations, property condemnation suits or consumer protection, funding is

generally obtained by pure contingency fee agreements under which a client will only

incur any expenses or legal fees if the client has been successful in its claim.



To our knowledge, there are no general statistics about figures involving third

party funding of litigation. CVM has statistics about the amount of money invested in

banks or investment houses in investment funds that are guaranteed by judgments.

However, this may not give any guidance about the percentage of claims that are funded

by third parties.

David MCKILLOP and John MCCAMUS (Canada)


Mr David McKillop

Professor John McCamus

NATIONAL REPORT – CANADA

Legal Aid

In Ontario, legal aid services are provided by Legal Aid Ontario (LAO), an

independent, publicly funded, publicly accountable non-profit corporation. LAO’s

mandate under the Legal Aid Services Act, 1998 is to “promote access to justice

throughout Ontario for low-income individuals by means of providing consistently high

quality legal aid services in a cost-effective and efficient manner.”1 LAO provides

services through a number of different channels, including certificates (through which

private bar lawyers acting for eligible clients are reimbursed by legal aid) duty counsel

(a mix of staff and private bar lawyers), staff offices which employ a mix of lawyers,

paralegals and legal aid workers, legal clinics, summary legal advice, public legal

education, alternative dispute resolution, and self-help materials.

Through its certificate program LAO offers primarily criminal law, family law

and immigration and refugee law coverage. Additionally, certificate coverage is

available for matters being heard before Ontario’s civil and criminal mental health law

tribunals (the Consent and Capacity Board and Ontario Review Board), for prison law

matters such as hearings before the Parole Board of Canada and, in limited

circumstances (when no legal clinic assistance is available) for some civil tribunal

matters related to poverty law.

Other than as noted above, LAO does not offer certificate coverage for civil

matters with two specific exceptions: applications for disclosure of confidential records

in criminal proceedings (these applications are known in Canada as “O’Connor/Mills

applications”, and Ontario issues approximately 25 of these each year) and test cases,

coroner’s inquests and group applications recommended for funding by LAO’s Group

Applications and Test Case Committee (known as GATCC).

LAO’s test case committee, GATCC, considers applications and recommends

approval of funding for matters in criminal, family, immigration and refugee, mental

health, Aboriginal, prison, poverty law, constitutional litigation under the Canadian

Charter of Rights and Freedoms, and coroner’s inquests, where established criteria are

met. GATCC will also consider applications in other areas of law if the legal issue

addressed in the application will benefit low-income Ontarians or disadvantaged

communities. Currently, GATCC operates with a relatively small budget (approximately

$.6 million annually in 2013/2014) and funds a limited number of cases; however the

1 Legal Aid Services Act, 1998, S.O. 1998, c.26, s.1.



cases funded through GATCC have the potential to have a broad impact and benefit

large numbers of people within LAO’s client base.

Further information about LAO and its services may be found on LAO’s

website.2

In addition to providing services through its certificate program, its duty counsel

program and staff offices, LAO also funds Ontario’s legal clinic system. A network of

legal clinics across the province provides “poverty law” services to low-income

Ontarians, focusing on areas such as access to social assistance benefits and housing

(e.g., landlord and tenant) matters. Several clinics have specialization in other areas,

including workers’ compensation, disability law, and immigration. They may provide

summary advice and, possibly, representation for other kinds of civil matters but each

clinic sets its own priorities and outside of the core areas of social assistance and

housing, which tend to dominate most clinic caseloads, coverage for other matters may

be uneven.

Much of clinic law advocacy is done before the administrative tribunals and

boards that consider social assistance, housing and other matters. It should also be noted

that legal aid clinics in Ontario frequently take on poverty law test case work, which can

reap significant, far-reaching benefits for low-income and disadvantaged communities.

Clinic test cases often involve several clinics working together and joining in

partnership with other community-based organizations that also serve low-income

clients.

Coverage

Coverage for legal aid in Ontario has been subject to numerous revisions. The

legal aid program in Ontario enjoyed nearly three decades of expansion following the

provincial government’s creation of the “Ontario Legal Aid Plan” (LAO’s predecessor

plan) in 1967. The program became financially unsustainable during the recession of the

mid-1990s and underwent significant cutbacks that included a more than 20% cut to the

financial eligibility guidelines for applicants for legal aid. At the same time, much of the

legal aid plan’s existing coverage for civil litigation was cut.

A brief period of expansion, including some reinstatement of civil litigation

coverage, followed the rebirth of the legal aid plan as Legal Aid Ontario, an

independent, publicly funded, publicly accountable non-profit corporation, at the end of

the 1990s. More coverage adjustments followed, however, and by 2002, the decision

was taken to eliminate coverage for fees for most civil litigation matters, leaving

coverage intact for disbursements only.

The most recent coverage revision took place in April 2010, when certificate

coverage for all civil litigation matters, with the exception of the above-noted

O’Connor/Mills applications and test cases recommended for funding by GATCC, was

2 Legal Aid Ontario, online: <http://www.legalaid.on.ca/en/ >.

http://www.legalaid.on.ca/en/



discontinued. By that time, however, very few civil litigation matters were still being

covered by LAO through the certificate program and, as noted above, such coverage

was restricted to funding for disbursements.

The remaining civil litigation coverage that was discontinued in 2010 included:

Claims for damages arising as a result of abuse, in a fiduciary relationship

Claims against disability insurers for reinstatement of long term disability

insurance

Actions for malicious prosecution, assault or wrongful detention

Real estate or mortgage actions

Personal injury actions, including medical malpractice

Actions against legal aid

Estate claims

Actions for damages against a lawyer

The 2010 decision to discontinue civil litigation coverage, with the above-noted

exceptions of test case funding recommended by GATCC and O’Connor/Mills

applications, was based on the availability of contingency fees as a viable alternative to

legal aid coverage for low-income persons having a meritorious civil claim. Before

2004, contingency fees had not been available in Ontario.

In addition to being affected by changes to coverage for legal aid according to

type of legal matter (“legal eligibility”), the scope of Ontario’s legal aid program has

also been affected by the erosion of its financial eligibility guidelines (“financial

eligibility”). LAO’s financial eligibility guidelines are set by provincial government

regulation and have not been adjusted since the mid-1990s when they were reduced by

the province as part of the recessionary cutbacks of that decade. A research study

conducted by LAO in 2012 has shown that, in spite of those cuts, nearly all of the low-

income population of Ontario as defined by Statistics Canada (people with income

below the Low Income Measure, or LIM) would have qualified for a legal aid certificate

in 1996. In the years since then, inflation has eroded LAO’s static financial eligibility

guidelines to the point that only about half of Ontarians with income below LIM would

now qualify – about one million fewer low-income people.


In Ontario and all other Canadian provinces and territories, legal expenses

insurance (LEI) coverage is available. A major provider of LEI is DAS Canada, a

subsidiary of the DAS Group which is based in Germany.

DAS Canada obtained its insurance license from the Financial Services

Commission of Ontario to offer legal expense insurance policies in the province in July



2010.3 Through DAS Canada, LEI policies are available to individuals, groups and

small and mid-sized businesses. According to the DAS Canada website, coverage is

available to meet various legal needs, including:

Legal advice

Contract disputes

Employment disputes

Property protection

Tax protection

Legal defence4

A DAS Canada LEI policy also includes unlimited access to a Legal Advice

Hotline.

In 2013, the Canadian Bar Association (CBA) released its report “Reaching

equal justice: an invitation to envision and act”.5 One of the issues discussed in the

report is the need for greater awareness and acceptance of LEI in Canada.

The CBA report highlighted the fact that LEI is popular in Europe, where

approximately 40% of the population has LEI coverage, but other than in the province

of Quebec LEI has not “caught on” in Canada, with only about $11-$12 million in LEI

coverage being purchased each year across the country.6 Even in Quebec, where an

advertising campaign explicitly targeted people whose income made them ineligible for

legal aid but who could still not readily afford legal services, only about 10% of people

in the province have acquired LEI coverage.7

The CBA report speculated that the low uptake of LEI in Canada, outside of the

province of Quebec, likely results chiefly from lack of awareness about the value of

having LEI. Unlike medical expenses, people do not usually expect to incur legal costs.

People may also assume that LEI coverage is expensive.8 As well, it was suggested that

lawyers may lack awareness about LEI or that the legal profession may be wary that

LEI will be “bad for business” (it was noted that the support of le Barreau du Québec

was largely responsible for the success of LEI in that province).9 Finally, the report

3 DAS Canada Press Release, "...Now when someone calls to ask about legal expense insurance, we

can point them in the direction of DAS..." (July 18, 2010), online:

<http://www.das.ca/Newsroom/Press-Releases.aspx?> 4 DAS Canada, “Products and Services”, online:<http://www.das.ca/Products-Services/Overview.aspx>.

5 Canadian Bar Association, Report of the CBA Access to Justice Committee, “Reaching equal justice: an

invitation to envision and act” (November 2013), online:

<http://www.cba.org/CBA/equaljustice/secure_pdf/EqualJusticeFinalReport-eng.pdf >, (CBA Report)., at

pages 101-103. 6 CBA Report, at page 101.

7 CBA Report, at page 101.

8 According to the CBA Report, the average stand-alone premium for a family is $150-$200 (in Canadian

currency) and a group purchase through a homeowner’s policy costs about $50 per year (CBA Report, at

page 102). 9 CBA Report, at page 102.

http://www.das.ca/Newsroom/Press-Releases.aspx

http://www.das.ca/Products-Services/Overview.aspx

http://www.cba.org/CBA/equaljustice/secure_pdf/EqualJusticeFinalReport-eng.pdf



speculated that restrictions on LEI coverage (for example, lack of coverage for family

law matters) may also have something to do with to poor uptake of LEI in Canada.10

The CBA report has identified LEI as an important tool for helping Canadians

access legal assistance, and it sets a target for 75% of middle income Canadians to have

legal insurance by 2030.11

In its report, the CBA undertakes to communicate about the contribution that

making LEI more available can make to access to justice, to develop a strategy to

increase public awareness about the benefits and relatively low cost of LEI, to work

with governments to explore the feasibility of mandatory legal insurance, based on

European models, and to collaborate with insurance providers to encourage them to

develop more LEI policies for Canadians, including in the area of family law.12

In

relation to the latter commitment, in September 2013 the CBA and DAS Canada

announced that they would be working in partnership to better inform Canadians and

the legal profession about the benefits of LEI.13


Contingency fees are available across Canada in some form, although each

province has its own rules. Ontario was the last Canadian province to permit the use of

contingency fee agreements in individual suits. The ban on contingency fee agreements

in Ontario was lifted on October 1, 2004, when legislative amendments were passed by

the Ontario government to permit their use.14

Currently, according to Ontario’s Solicitors Act:

“A solicitor may enter into a contingency fee agreement that provides that the

remuneration paid to the solicitor for the legal services provided to or on behalf

of the client is contingent, in whole or in part, on the successful disposition or

completion of the matter in respect of which services are provided”.15

There are restrictions on the use of contingency fee agreements in Ontario. The

Solicitors Act prohibits contingency fee agreements in proceedings under Canada’s

10

CBA Report, at page 102. 11



DAS Canada Press Release, “DAS Canada sponsors Canadian Bar Association Access to Justice

Initiative” (September 3, 2013), online: <http://www.das.ca/Newsroom/Press-Releases.aspx>. 14

Contingency fees in individual suits became available in Ontario on October 1, 2004, through

amendments to the Solicitors Act, R.S.O. 1990, chapter s.15, and the enactment of corresponding

regulations under the Solicitors Act: Ontario Regulation 194/04, “Contingency Fee Agreements”

(Contingency Fee Regulation). 15

Solicitors Act, s.28(2).

http://www.das.ca/Newsroom/Press-Releases.aspx



Criminal Code “or any other criminal or quasi-criminal proceeding” and in any family

law matter.16

The Act also requires contingency fee agreements to be in writing.17

The Act and regulations made under the Act deal with the maximum amount of a

contingency fee, the assessment of a contingency fee, the contents of contingency fee

agreements and matters that are not to be included in contingency fee agreements.

A specific list of the details that should be included in any contingency fee

agreement is set out in s.2 of the Contingency Fee Agreements Regulation to the

Solicitors Act.18

Some of the details include:

A statement that indicates that the client and solicitor have discussed other

options for retaining the solicitor and that the client has chosen to retain the

solicitor by way of a contingency fee agreement

A statement that sets out the method by which the fee is to be determined

and a simple example showing how the contingency fee is calculated

A statement that informs the client that the client retains the right to make all

critical decisions regarding the conduct of the matter

Despite any terms in a contingency fee agreement, a solicitor for a plaintiff is

not to recover more in fees under the agreement than the plaintiff recovers as damages

or receives by way of settlement.19

A court may either reduce the amount payable under a contingency fee

agreement or order the agreement to be cancelled.20

In addition to the requirements of the Solicitors Act and regulations in respect of

contingency fees, Ontario lawyers entering into these agreements are bound to adhere to

The Rules of Professional Conduct established by the Law Society of Upper Canada,

which is the self-governing body that licenses, regulates and disciplines Ontario’s

lawyers and licensed paralegals.21

Subrule 2.08 of the Rules of Professional Conduct,

which deals with reasonable fees and disbursements, sets out both the general rule and

the specific requirements that apply to contingency fees and contingency fee

arrangements:

‘2.08(1) A lawyer shall not charge or accept any amount for a fee or

disbursement unless it is fair and reasonable and has been disclosed in a timely

fashion.

16

Solicitors Act, s.28(3). 17

Solicitors Act, s.28(4). 18

O.Reg. 195.04, “Contingency Fee Agreements” [Contingency Fee Regulation]. 19

Contingency Fee Regulation, s.7. 20

Solicitors Act, s.19. 21

The Law Society of Upper Canada, Rules of Professional Conduct, online:

<http://www.lsuc.on.ca/WorkArea/DownloadAsset.aspx?id=2147486159 >.

http://www.lsuc.on.ca/WorkArea/DownloadAsset.aspx?id=2147486159



2.08(3) Subject to subrule (1) except in family law or criminal or quasi-criminal

matters, a lawyer may enter into a written agreement in accordance with the

Solicitors Act and the regulations thereunder, that provides that the lawyer’s fee

is contingent, in whole or in part, on the successful disposition or completion of

the matter for which the lawyer's services are to be provided.’

The Law Society of Upper Canada’s “Commentary” to subrule 2.08(3) of the

lawyers’ Rules of Professional Conduct provides further guidance in respect of

contingency fee agreements:

‘In determining the appropriate percentage or other basis of the contingency fee,

the lawyer and the client should consider a number of factors, including the

likelihood of success, the nature and complexity of the claim, the expense and

risk of pursuing it, the amount of the expected recovery and who is to receive an

award of costs. The lawyer and client may agree that in addition to the fee

payable under the agreement, any amount arising as a result of an award of

costs or costs obtained as a part of a settlement is to be paid to the lawyer,

which agreement under the Solicitors Act must receive judicial approval. In

such circumstances, a smaller percentage of the award than would otherwise be

agreed upon for the contingency fee, after considering all relevant factors, will

generally be appropriate. The test is whether the fee in all of the circumstances

is fair and reasonable.’

Contingency fee agreements have been available in Ontario for a decade now.

Unfortunately, no statistics on the prevalence of the use of these agreements appear to

be available.

Third Party Funding

Third party funding of litigation, in which a funder agrees to provide funding to

support a case in return for a share of any damages or settlement money, is a recent

phenomenon in Ontario. Historically distrusted based on the premise that litigation for

profit is contrary to the public interest and wrests control of the case from the actual

plaintiff, third party funding agreements are starting to gain acceptance in class actions

in some situations and where certain conditions are met.

Since 1992, Ontario plaintiffs have been able to apply to the Class Proceedings

Fund of the Law Foundation of Ontario for class action funding.22

Recourse to a third

22

The Class Proceedings Fund was established in 1992 through an initial grant from the Law Foundation

of Ontario. The fund provides financial support to approved class action plaintiffs for disbursements, and

indemnifies plaintiffs for costs that may be awarded against them. The Law Foundation’s Class

Proceedings Committee makes a determination to provide support to a plaintiff based on a number of

factors, including the strength of the case and the scope of the public interests involved: The Law

Foundation of Ontario, “Class Proceedings Fund”, online: <http://www.lawfoundation.on.ca/class-

proceedings-fund/ >

http://www.lawfoundation.on.ca/class-proceedings-fund/

http://www.lawfoundation.on.ca/class-proceedings-fund/



party funding agreement appears to be frequently related to situations where the Class

Proceedings Fund rejects assumption of the risk of an adverse cost award against the

plaintiff.

Third party funding agreements are not specifically regulated and are currently

monitored and approved on a case-specific basis by judges. Although courts scrutinize

these agreements carefully for signs of unreasonableness and abuse, they do not reject

them out of hand and accept that they may be capable of promoting access to justice. A

recent Ontario decision in which a third party funding agreement was approved has

noted that third party funding of class proceedings has been accepted in England and

Australia and “is permitted in Ontario as an appropriate manner of allowing plaintiffs

and class counsel to mitigate the substantial risks in class proceedings”.23

This decision

also sets out considerations and circumstances that courts take into account when

considering third party funding agreements, including the following:

Third party funding agreements are not categorically illegal on the grounds

of champerty or maintenance, but a particular third party funding agreement

might be illegal as champertous or on some other basis

Plaintiffs must obtain court approval to enter into a third party funding

agreement and the agreement must be promptly disclosed to the court

The agreement must not compromise or impair either the lawyer-client

relationship or the lawyer’s professional judgement

The right of the representative plaintiff to instruct and control the litigation

must not be diminished

The court must be satisfied that the agreement is necessary to provide access

to justice to the plaintiff and the class members

In seeking approval for a third party funding agreement, it is not necessary to

have first applied to the Class Proceedings Fund for funding. If, however,

approval from the Fund is sought and refused, nothing can be taken from the

fact that the Class Proceedings Fund was not prepared to provide litigation

funding

To be approved, the third party funding agreement must contain a term that

the third party funder is bound by the deemed undertaking and is also bound

to keep confidential any confidential or privileged information

It is an acceptable term of a third party funding agreement to require the

third party funder to pay into court security for the defendant’s costs

The court must be satisfied that the agreement is fair and reasonable24

The use of third party funding agreements in Ontario is still in a nascent stage,

and judicial precedents dealing with their use have only started to come forward in the

past five years. One may reasonably speculate that their use will increase now that the

courts are signalling their willingness to accept the validity of these agreements

provided that specific conditions and safeguards are in place.

23

Bayens v. Kinross Gold Corporation, 2013 ONSC 4974 (CanLII) (Ont.S.C.J.), at para. 34. 24

Bayens v. Kinross Gold Corporation, at para. 41.

Assaf TABEKA and Michael KARAYANNI (Israel)


Assaf TABEKA & Michael KARAYANNI

NATIONAL REPORT – ISRAEL

LEGAL AID AND LEGAL EXPENSES POLICY:

THE ISRAELI PERSPECTIVE

Legal Aid

Basic Characterization and Main Principles

The Legal Aid Law, 1972 and The Legal Aid Regulations, 1973 empowers the

Legal Aid Department in the Ministry of Justice to grant legal aid in various legal

proceedings, including the initiation and handling of a certain kind of civil claims to the

needy who meet certain qualifications.

Legal aid is provided free of charge, except for a participation fee which is

determined in accordance with the financial ability of the applicant. (indigent applicants

are exempt from paying the fee). The aid is provided through five regional Legal Aid

Offices (located in Jerusalem, Tel-Aviv, Haifa, Be'er-Sheva and Nazareth). The Legal

Aid Department staff has about 250 regular employees and works with about 1,100

external lawyers. The aid includes legal advice, assistance in drafting legal documents

and mainly legal representation in courts (including the labor courts and the religious

courts), in the Executions Offices (in charge of executing judgments), and in quasi-

judicial committees and tribunals (such as the regional psychiatric committees, in cases

when an order of involuntary hospitalization is given).

The Legal Aid Department budget has increased steadily over the years: in 2000

the yearly budget was 45 million NIS (10.7 million USD; 1 USD = 4.2 NIS); in 2010 it

was about 78 million NIS. The number of requests for legal assistance, and the number

of requests granted, is constantly on the rise: in 2009 the department received 60,926

requests for assistance, and granted 42,975; in 2011, the department received 71,677

requests for assistance, and 54,925 of them responded positively.

The main purpose of the Legal Aid Department is the assurance of accessible

legal services. Thus, it's activity is not summed up with just providing the legal services,

but also extends the accessibility value in the physical perspective of the term (by

arriving to the houses of indigents who cannot arrive by themselves to the office bureau,

and through the existence of several reception centers located in different cities). This

extension of the activity is expressed also in the cultural sense of the term (by providing

some of the services in several languages). In addition, the Legal Aid Department

maintains continuous contact with community and national assistance centers, such as

social workers and shelters for battered women.



Finally, it should be mentioned that certain types of non-governmental legal aid

services are provided by a number of institutions and organizations. Amongst these are

clinical courses in law schools and legal aid departments in labor unions, consumer

protection organizations, and human rights organizations .

2.Areas of Law in which the Legal Aid is Given

Legal Aid is given in various fields: civil issues, social security issues, family

law and personal status (including child custody, alimony and wills) and numerous

unique issues (human trafficking, children and youth, Holocaust survivors, domestic

violence, labor law, assistance for crime victims, execution of judgments proceedings

bankruptcy law and involuntary hospitalization).

The civil issues include: protection of rights related to housing (including rent

issues and evacuation demands), financial matters (including torts), claims regarding the

rights of veterans, and business licensing affairs (including the regulation of

occupations or professions).

Examples of the main civil areas that would grant the right to a legal aid:

financial claims, public housing, contract claims, neighbor's disputes, stalking

prevention and restraining orders, consumer protection, bills, car accidents, injuries, loss

of property, medical malpractice, banking, defamation, and privacy law.

3.Eligibility for Legal Aid

Eligibility for legal aid in civil matters is contingent on three conditions:

A. The Subject Matter Term: The subject matter of the service sought is one of

those included in the list of issues mentioned above ;

B. The Financial Term: The applicant is entitled to receive legal aid according to

a "means test" (individual or family up to three persons that their income is up to 67%

of the national average wage) and to a "property test" (realizable assets such as savings,

vehicles or property in respect of which you can get a loan, not exceeding triple the

national average wage).

C. The Probability Term: The future lawsuit has a reasonable basis in terms of

law, facts and evidence.

It should be noted that some of the applicants and some of the matters at hand

are entitled of legal aid notwithstanding the fact that they do not meet the terms

indicated. and thus are given free of charge. Amongst those are social security matters

(including employees' rights, national health security issues, and matters involve

domestic violence), matters of human trafficking, representation of people who were

forcibly hospitalized, representation in the regional psychiatric committees,

representation of minors, handicapped persons, elderly and Holocaust survivors in

several issues (such as allowances, insurance rights, and pensions).

4.Revisions and Amendments in Legal Aid

Over the years, several amendments to the law and regulations relating to legal

aid were made. These amendments can be divided to two groups – technical



institutional adjustments and substantial amendments concerning the scope of service

granted by the Legal Aid Department.

The first kind of legislative amendments was concerned with the fees, wages and

work conditions of attorneys and medical experts working in or with the Legal Aid

Department. Most of these amendments focused on adjusting and updating the costs of

those professionals' service and apparatuses needed for that service.

The second kind of legislative amendments (the most important ones were made

in 1995, 2001 and 2014) concerned the eligibility for legal aid and the conditions

needed in order to grant it. These amendments can be characterized by the following:

First, they defined in detail the various eligibility tests for legal aid, including the type

and extent of property relevant to the means test described above. Second, they

determined the requirement to pay participation fee for obtaining legal aid, as well as

the exemption granted to applicants who cannot pay this fee. Third, they have expanded

the type and scope of cases in which applicant is entitled to grant legal aid. These

amendments, therefore, increased the number of poor applicants entitled to legal aid in

the country, as the steady growing number of those people consistently shows over the

years.

B.Legal Expenses Insurance

There are two types of legal expenses insurance in Israel: the first type is

"related legal expenses insurance", which is part of the scope of responsibility that

insurance company provides for damage to third parties. The second type is a "direct

legal expenses insurance" available under contract for the specific purchase of insurance

coverage for the insured's legal costs.

The first type of insurance is usually interpreted widely, as it comprises all legal

costs, including, for example, the cost of bringing the evidence, the court fees, fees of

expert witnesses, attorney's fees and costs awarded to the adversary. Additionally, in

order to establish eligibility under this insurance, there is no dependency in the

procedure outcomes, and the amount of indemnity is not limited to the total amount of

insurance, unless the parties expressly agreed to a specific indemnity rate.

The second type of insurance covers all legal costs such as attorney's fees, court

fees, cost of bringing of evidence, expert witness fees and expenses awarded to the

adversary. Expenses for legal advice may also be considered as legal expenses.

Common cases are: insurance coverage claim based on tort and contractual issues.

However, insurance companies allow coverage for legal expenses claims also in other

areas such as labor law, real estate, tax matters, family law and even minor criminal

cases.

C.Contingency Fee Agreements

1.General Principles



In Israel, the determination of the rate and manner of payment concerning

attorney's fees is given, in general, to a negotiation between the client and the attorney.

Similar to current arrangements in other countries in the world, there are several

standard ways to determine attorney's fees: Agreement in which the client pays a fixed

amount of money for specific legal action without considering the amount of time

invested in this action or its result; fees according to an hourly rate; and contingency fee,

a mechanism whereby the fee result dependent.

The use of contingency fee agreements is allowed in Israeli law as a rule only in

civil proceedings (but not allowed in criminal proceedings). It is also practiced in

different inancial transactions, such as the purchase of property (where it is customary

that the attorney's fee payment is determined as a percentage of the purchase price), in

legal service debt collection (where it is customary that the fees derived from the

amount the attorney actually collects from the debtor), and in tort proceedings (where it

is customary that the attorney's fee payment is determined as a percentage of the

compensation gained for the client).

The Israeli Bar Association (IBA) maintains a special committee that deals with

matters of attorney's fees. The committee answers lawyers and clients questions about

attorney's fees agreements, and also gives expert opinions on these questions for the

courts, arbitrators and the general public.

2.Maximum Fee Rates According to the law, the IBA may set a maximum fee rates for certain legal

services. The most prominent examples are claims for compensation to victims of road

accidents. In this case, there are three possibilities of contingency fee rates: first, where

a compromise was reached between the claimant and the defendant before filing of suit

in court. In this situation, the fee will not exceed 8% of the amount determined for the

plaintiff. Second, where a compromise was reached between the plaintiff and the

defendant after filing the claim to court but without a legal proceeding conducted. In

this situation, the fee will not exceed 11% of the amount stipulated to the plaintiff. Third,

where a case had been submitted to court and legal proceedings was conducted. In this

situation, the fee will not exceed 13% of the amount stipulated to the plaintiff. The

Supreme Court referred to the issue of contingency agreement in claims related to road

accidents and clarified that the purpose of this arrangement is purely social, and it

comes in order to facilitate road accident victims who suffered physical injuries the fair

opportunity to receive appropriate and timely remedy.

In addition, the IBA has set a maximum fee rates for personal injury claims that

are not the result of car accidents. In this case there are, again, three possibilities of

contingency fee rates: when the case has been settled before the filing of the claim -– 15%

from the amount determined for the plaintiff; when a compromise was reached after the

filing of the claim and before the trial stage – 17.5%; beyond trial – 20%. It should be

noted that this mechanism is not formally enshrined in law, but it is considered

acceptable in the attorney's milieu, a kind of custom, and guides the operation of

lawyers in the state.

One specific field in which there is an explicit statutory restrictions on the

amount of attorney's fees concerns the handling of Holocaust survivors claims in



recognition of rights. Claims of Holocaust victims are limited to a maximum fee of 8%

of the total remuneration received by the plaintiff (and in no case exceed the total

amount of 7,013 NIS).

D.Third Party Funding

Israeli law does not prohibit third party funding for legal claims (with one

exception: lawsuit funding cannot be done by the attorney handling the case).

In practice, there are two kinds of legal proceedings funding that are conducted

by someone who is not the plaintiff himself. One type of third party funding is

conducted by the governmental fund of claims financing in the Ministry of Justice,

which helps citizens in funding mostly class actions. A second type of funding is private,

using a limited number of private companies that invest money in funding legal

proceedings at high chances of success, as an investment channel. This funding includes

the payment of court fees, the attorney's fees and the payment required for experts'

opinions. It should be noted that this type of financing in Israel is in a very early stages

of existence, and it began to be realized only in recent years and only in a limited extent.

It is also noteworthy that in the case of class action, the law regulating the

proceedings and enacted in 2006, makes it possible to receive funding from a special

fund created under the mentioned law. The idea is that since a class action is intended to

serve the public at large, so at least in some matters, the representative should there be

assisted from this public fund.



E.H. (Eun Hyeon) Kang1

NATIONAL REPORT: KOREA

A STUDY ON THE EMERGING CRISIS IN KOREAN LEGAL

SYSTEM CONCERNING LEGAL AID AND THE ALTERNATIVE

MEANS OF PROVIDING ASSISTANCE TO THE GENERAL

PUBLIC (LEGAL INSURANCE, PRIVATE SUPPORT OF

MEDIATION, ETC.)

I. Introduction

Under Article 11 of the Constitution of the Republic of Korea (hereinafter

'CRK'), "all citizens shall be equal before the law and there must be no discrimination in

political, economic, social, or cultural life on account of sex, religion, or social status."

The Article 27 of CRK mentions that "All citizens shall have the right to be tried in

conformity with the Act by judges qualified under the Constitution and the Act." To

implement these particular principles and other fundamental ones of CRK, the ideal

forms of legal aid should be those that allow every citizen access to the judicial system

and guarantee the right of equal protection.

Due to the limits on government resources and assets, however, the legal aid

offered through the public service is bound to have its own shortcomings. Therefore, the

government should offer more efficient forms of legal aid in order to provide its citizens

legal services that are more far reaching and effective. Otherwise, the substantive rights

of equal protection of Korean citizens would be nominal at best. Implementing

appropriate measures that can help provide better legal aid to the public is a matter of

constitutional urgency.

In Korea, there are a number of governmental institutions through which legal

aid is provided to the public: 1) the litigation aid system of Civil Procedure Act, 2) the

state-appointed counsel systems of Criminal Procedure Act, 3) the legal assistance

offered by Korea Legal Aid Corporation, and 4) various ADR procedures handled by

private groups. The current state of each of those systems in Korea will be discussed in

the above mentioned order, and it will be followed by proposal of alternative means of

providing legal aid and other measures that can improve the existing systems.

1 Attorney at Law, Completion of a Doctoral Course (Specialised in Civil Procedural Law) at Hanyang

University in Korea

E.H. (Eun Hyeon) KANG (Korea)


II. The Current State of the Legal Aid System in Korea 1.

Litigation Aid System

(1) Introduction

Under Article 128 of the Korean Civil Procedure Act(hereinafter 'KCPA'), "(1) A

court may grant a litigation aid, either ex officio or upon request of a person who falls

short of the solvency to pay the costs of lawsuit: Provided, that the same will not apply

to the case where it is obvious that the lawsuit will fail. (2) the applicant under

paragraph (1) shall vindicate the reason for such aid." In here, a person to whom

litigation aid may be granted is not limited to a private individual; a judicial person may

also request litigation aid as well. Not only the plaintiffs but the defendants are able to

apply the litigation aid in court.

The scope of the litigation aid for a lawsuit and a compulsory enforcement are as

follows: Provided, that a court may, when there exists a proper reason therefore, render

a litigation aid within the limit of part of the following subparagraphs; deferment of a

payment of litigation costs; deferment of a payment of fees and substitute payment for a

lawyer and an enforcement officer; exemption of the security for the costs of lawsuit;

and deferment or exemption of such other expenses as prescribed by the Supreme Court

Regulations{KCPA,Article 129(1)}.

One may apply for a grant of litigation aid at each instance of trial in court. The

effects of a litigation aid will extend only to the persons who have received it {KCPA,

Article 130(1)}. The court may order the successor to litigation to pay the costs deferred

so far {KCPA, Article 130(2)}. The costs deferred so far for the person who has been

granted a litigation aid, may be collected directly from the other party who has been

judged to pay them {KCPA, Article 132(1)}.

The requisites for receiving litigation aid must be as follows; (1) the lack of

funds for paying the litigation costs, and (2) the proof to a certain extent that the

likelihood of the lawsuit in question resulting in a failure is not definitive. The above

requisites are to be proved by the applicant, with the second requisite to be interpreted

in favor of and for the benefit of the applicant.

A judgment on the litigation aid must be rendered by the court which keeps the

record of litigation {KCPA, Article 128(3)}. Therefore in accordance with the above

article, the court must be the chief entity through which the judicial welfare for the

general public is realized by means of providing an active litigation aid even to those

who do not request it but are in need of it.

(2) The Current State and Shortcomings

The number of people who apply for the litigation aid is very low as of present,

and even lower is the number of decisions to grant litigation aid. However, in December

2005, there was a sharp increase in these numbers owing to litigation aid grants now



being extended to individual bankruptcy, financial workouts and debt exemptions.

Meanwhile, if a lawyer or an enforcement officer fails to receive any fees, a reasonable

amount must be paid to him from the National Treasury {KCPA, Article 129(2)}. It

means that the court must cover a substantial portion of the litigation costs, and that is a

fact of significant importance as the system’s utility in the raising of funds for litigation

aid would be one of the key factors in assessing its effectiveness.

According to Article 38 of the Judicial Conciliation of Civil Disputes Act, the

litigation aid system of KCPA does not pertain to any conciliation processes. Also,

those involved in arbitrations and pre-lawsuit compromises cannot receive any litigation

aid either in compliance with similar passages from other Acts. For non-litigation cases,

the litigation aid system pertinent to them works quite differently from that of KCPA

(Refer to the Act on Civil Procedure for Non-contentious Cases Article 8 and 10). For

the benefit of those involved in litigation and to guarantee their substantial right of

access to courts, it is essential that the litigation aid system of KCPA be applied to all

the above processes to the fullest extent.

2. State-appointed Counsel System

(1) Introduction

Article 12(4) of CRK states that "Any person who is arrested or detained shall

have the right to prompt assistance of counsel. When a criminal defendant is unable to

secure counsel by his own efforts, the State shall assign counsel for the defendant as

prescribed by Act." This has been put into place to make the adversary system more

substantive in accordance with the principle of equality of arms, which states the

defendant must have his/her own counsel who will help him/her against the prosecutor.

Especially if the defendant has no economic ability or satisfies several other

requirements set by the law, the state either ex officio or upon request of the defendant

assigns counsel for the defendant. This is the state-appointed counsel system.

Under Article 33 of the Korean Criminal Procedure Act, the requirements for

assigning state-appointed counsel are as follows: Either when the defendant is placed

under arrest; when the defendant is a minor; when the defendant is seventy years of age

or over; when the defendant is deaf and dumb; when the defendant is suspected of

having a mental and physical disorder; or when the defendant is indicted for a case

corresponding to death penalty, life imprisonment with or without labour for a short

term of three years or more, the state must appoint counsel for the good of the defendant.

Moreover, where the defendant is unable to appoint a defence counsel because of

poverty or any other reason, if the defendant requests, the court must appoint a defence

counsel. The above mentioned are some of the key measures that have been established

to supplement the defendant’s ability to defend himself or herself, when the case itself is

of great importance, or when the accused is expected to suffer irrecoverable damages as

the result of the trial.




The state-appointed counsel system of Korea still has a number of flaws

considering the ideal goals set by CRK. Under the Criminal Procedure Act, the accused

will be given opportune moments to request state-appointed counsel in most cases.

However, a suspect placed under an on-going investigation is rarely given such an

opportunity to request counsel, that is, except through the habeas corpus process. In

practice, not too many defendants have the chance to have an attorney appointed to

them by the state in spite of the system being in place. Moreover, the recompense for

the defence being too small prevents the defendants from receiving adequate assistance

from the counsel.

3. Legal Assistance Services Available from the Korea Legal Aid

Corporation

(1) Introduction

The Korean Legal Aid Act (hereinafter ‘KLAA’) has been put in place to protect

fundamental human rights and to further contribute to the promotion of legal welfare

among the general public by providing legal aid to those in economic difficulty, or not

adequately protected by the law due to their general lack of legal knowledge (KLAA,

Article 1). This Act mostly provides the specifics and guidelines regarding the

administration and management of the Korea Legal Aid Corporation (hereinafter

‘KLAC’). The requirements and procedures, etc. of the legal aid assistance to be

provided by KLAC, are determined by the provisions of KLAC with approval of the

Minister of Justice (KLAA, Article 22).

The scope of service for KLAC includes civil, family and criminal cases, pre-

lawsuit aids, and legal aid and general legal counselling. The number of instances where

legal assistance was provided by KLAC has been steadily increasing, and in 2011,

reaching 122,057 for civil cases and family disputes, being approximately 20,000 for

criminal cases, and surpassing 1,242,783 for the legal counselling. The numbers have

been steadily increasing as of present.


The president of KLAC is appointed by the Minister of Justice in Korea, and the

directors and the auditor are appointed by the Minister of Justice upon recommendation

of the President of Korea {KLAA, Article 13(2)}. The Minister of Justice may also

dismiss any of the executive officers who fall to meet any of the requisites of KLAA,

Article 16(2). Furthermore, he or she can exert considerable influence in determining

the ways in which the provisions of KLAC are applied to the parameter of its legal aid

services {KLAA, Article 22}. The above are the indication that KLAC is not as

independent or autonomous of an organization as it is intended to be, but rather a mere

civil service entity directly under the Minister of Justice, susceptible to external

influences. However, considering the extent of legal aid services of which KLAC is in

charge, the interests of KLAC's clients, in practice, are possible to conflict with the

administrative organs' interests. Therefore, it is necessary for KLAC to be largely free

from government control.



In addition to that, KLAC should be operated with the following financial

resources: (1) contributions and subsidies provided by the government; (2) monetary

assets and other types of donations from persons, other than those of the government; (3)

borrowed funds related to projects and activities that pertain to KLAC; (4) proceeds

derived from any activities of KLAC; and (5) other types of proceeds {KLAA Article

24}. The present funding for KLAC mostly consists of government subsidies and the

organization funds which are raised from them. This is another indication that KLAC is

dependent on the Ministry of Justice. KLAC will need to make more efforts to become

independent from the influence of the central government by securing more private

funds or subsidies from local governments and affiliated organizations.

4. Lawyer's Obligation to the Public Service Activity

Each attorney-at-law must engage in public interest activities for not less than a

specified number of hours a year {Attorney at Law Act, Article 27(1)}. As a

consequence, the Korean Bar Association rules that the minimum hours of public

activities by an attorney must be more than 30 hours in the Regulation of Public

Activities and Others. The attorneys’ public services at present cover wide variety of the

legal aid fields in Korea, for examples, as a free legal adviser of problems occurred in

common life, a participant of the legislation processes, and a public monitor against

several administrative organizations, etc.

III. The Method to Improve Current Systems or the

Alternative Solutions

1. Amelioration of Current Litigation Aid System in Korea

The process manual of the litigation aid system must be formulized for the

parties who have lack of recognition to the above system. There is a tendency that the

parties who needs the litigation aid have no or not enough knowledge of it. Producing

and releasing the manual will be a meaningful work for the people to educate the

litigation aid system in order for them to more easily approach that system. The court

also must be actively notify the system in the process of the litigation and induce more

parties to apply the aid. Then, the courts exclusively in charge of litigation aid must be

needed for providing more efficient and active aid to the citizens.

On the other hand, the litigation aid system of KCPA and service of legal

assistance by KLAC must be integrated into one window. Current systems of above two

are duplicative in the scope of the parties who can use the aid and the scope of the

assistance. At first, the court can decide to give litigation aid for a certain party, and next

KLAC can give the substantial assistance to the party in connection with the court. The

funds of the court are able to be provided for the assistance of KLAC. Lastly, the

enough budgets for the aid must be ensured.



2. Improvement Plan of Current State-appointed Counsel

The arrested must have a state-appointed attorney from the judicial police

officers’ or prosecutor’s investigation phase in order for the constitutional right of the

arrested to be fully protected. That is because it is more likely to give damages to the

human rights while the arrested is under the investigation process. The more cases must

be included which an attorney is necessary. An attorney’s legal aid from the phase of

investigation can make it available to provide more proper and timely assistance for the

arrested.

Korean courts currently manage an exclusively state-appointed attorney system,

and it has been quite well operated, and has gotten many achievements. An exclusively

state-appointed attorney is not allowed to have other private cases, and he/she gets

remuneration for his/her activities from the state. Therefore, it makes the attorney have

independence from the individual interests and allow him/her to be more fully

concentrated on the state-appointed cases of him/her. It is highly esteemed system at

present in Korea, so we have to make the best use of the system. Finally, the

remuneration of the assistance by the state-appointed attorney must be increased.

3. How to Maximize Utilizing the system of KLAC

KLAC must notice more wide range of social problems than the present time, in

special, diffuse and fragmented interests of social levels being not traditionally

represented enough, such as legal issues occurred due to the information-oriented

society, subjects of the immigration law and expatriate employees occurred by the

movements of human resources owing to the globalization, environment problems,

urban poor issues, discussions of farming and fishing communities. Moreover, KLAC

must try experimental lawsuits more in order to increase the interests of the whole of the

poor or must do its endeavour to legislatively resolve the social problems of the

residences, welfares and city policies for the poor.

4. Legal Insurance

Since 2009, it has been possible to cover the unexpected legal expenses by the

insurance in Korea. The private corporation (DAS, 99.8% shareholder is DAS AG in

Germany) has been offering the goods of insurance in relation to (1) the right and the

obligation between the family relationships, (2) the real property for residence (the

lessor and the lessee), (3) ordinary life, (4) traffic accident, and (5) legal advice. Only if

the insurer gets the permission to initiate the lawsuit by the insurance company, all costs

of the lawsuit procedure will be covered from the insurance. It can reduce unexpected

legal fees of the family, but it also can increase reckless disputes due to the decrease of

cost burden.

Until now, it has not that been utilized by the citizens of Korea, due to the

resistance feeling to accept that it is possible for them to get caught into any lawsuit

during their lifetime. However, it is necessary to cover the risk of expenses for the



dispute by the insurance. More products of legal insurance must be offered to the public

in order for the people to have a chance to choose.

5. Private Support of Mediation

A legal aid system must be established to carry out legal aid projects in the

Korean Bar Association, and its branches may be established in local bar associations

{Attorney at Law Act, Article 84}. With this Act, the Korean Bar Association is now

involved in various fields of legal aid. Other than that, there exists the Korea Legal Aid

Centre for Family Relations that cares mostly for the family problems, and it is one of

the most active organizations achieving many settlements or compromises of cases

established by the private sector.

However, for the rightful assistance to the public, the role of the private sector

must be greatly increased. The government must give more subsidies to the private

mediation organizations, etc., and give any kind of approval or special power to enforce

their decisions of mediation or settlement.

Kinga FLAGA-GIERUSZYNSKA (Poland)


Kinga Flaga-Gieruszynska

NATIONAL REPORT: POLAND

Legal Aid

In the Polish legal system there are two forms of legal aid in civil cases:

1) Exemption from court costs; and

2) Establishment of an ex officio legal representative in litigation.

EXEMPTION FROM COURT COSTS

The first form of legal assistance aimed at the elimination of financial barriers to

access to the courts takes two forms - exemption from court costs by virtue of statutory

law and exemption from court costs by judicial decision

I. Exemption from court costs by statutory law

This form of exemption from court costs is independent of the financial position,

income and family situation of the entitled entities and was adopted in art. 96 et seq. of

the Act of 28 July 2005 on court costs in civil cases (consolidated text – Journal of

Laws of 2010 No. 90, item. 594, as amended.) and refers exhaustively to a specified

catalogue of actors in civil cases:

1. a party seeking to establish paternity or maternity and related claims;

2. a party seeking maintenance claims and the defendant in a case for the reduction

of maintenance;

3. a party applying for the recognition of contractual provisions as wrongful (this is

a kind of civil cases, whose principal purpose is to protect not only the

individual, but also collective interests of consumers, as wrongful contractual

provisions reach the public register of the President of the Office of Competition

and Consumer Protection);

4. an employee bringing an action or a party lodging an appeal with the labour and

social security court, with certain exceptions;

5. a guardian ad litem appointed by the adjudicating court or a family court for a

given case;

6. the prosecutor, the Ombudsman, the Ombudsman for Children and the Patient

Ombudsman;

7. a local (municipal) consumer ombudsman in cases of practices restricting

competition and practices infringing collective consumer interests;

8. a labour inspector and trade unions in matters of labour law;

9. a party in cases concerning the protection of metal health;



10. an incapacitated person in cases of repeal or amendment of incapacitation;

11. a party, who has been exempt from court costs by the court - in terms of the

exemption granted to them;

12. a local (municipal) consumer ombudsman in cases of interests of individual

consumers;

13. a party seeking compensation for the damage caused by the operation of a

mining plant referred to in Chapter VIII of the Act of 9 June 2011 - Geological

and Mining Law (Journal of Laws No. 163, item. 981).

The guardian’s expenses are borne temporary by the party for whom the

guardian was established, and if it is not possible - the party who, by their application or

action, caused the appointment of the guardian, unless a specific provision provides

otherwise. In other cases, the expenses of a party exempt from court costs are

temporarily borne by the Treasury. However, in the event that an action to establish

paternity proves to be manifestly unfounded, the court, in the decision closing the

proceedings, may charge the applicant with legal costs not covered, taking into account

all the circumstances of the case.

In the course of proceedings in employment law cases of employee claims, the

expenses charged to the employee are temporarily borne by the Treasury. The Labour

Court, in the decision closing the proceedings in the instance, decides on these expenses,

except that the charging the employee with these costs may occur in particularly

justified cases. In the course of social security proceedings, the expenses are borne by

the Treasury.

The party fully exempt from court costs by virtue of statutory law does not pay

court fees and does not bear expenses, which are temporarily charged to the Treasury.

II.Exemption by judicial decision

Exemption from court costs of an individual character may be granted by virtue of a

judgement rendered by a court or a referendary (court official) in the form of a decision.

In granting this exemption, the court does not act ex officio, but it may, however,

instruct a party who does not have a professional attorney of the existence of the

entitlement in this matter.

Exemption from court costs may be either full or partial. Of particular interest is

the characterization of the principles of the partial exemption from court costs. It is

issued after an analysis of the economic situation of the party, if it shows that the party

may only bear a portion of these costs. The exemption may take the form of a sum,

fraction or percentage, and may also be manifested in the exemption of certain fees or

expenses, as well as in the granting of an exemption from a certain part of the claim or

on certain claims pursued jointly. In other respects, not covered by the exemption, the

party is obligated to pay fees and incur expenses in the amount in which it is not exempt

from court costs. Exemption from court costs of one of the defendants sued jointly and

severally does not release other defendants from the obligation to pay fees.



A party as well as any participant of the proceedings may file a request for

exemption from court costs. As a consequence, entities that may apply for exemption

from court costs in the light of said law on court costs in civil cases (LCCCC) include:

1) an individual who has made a declaration that he is unable to bear the costs

without detriment to the upkeep of himself and his family, which should indicate

information on the family status, assets, income and sources of livelihood of the

person seeking exemption from costs (art. 102 LCCCC);

2) a legal person or an organizational unit without legal personality, upon which a

separate Act confers legal capacity – if they demonstrate that they do not possess

means to cover the costs (art. 103 LCCCC);

3) public benefit organizations operating under the provisions on the activities of

public benefit organizations and volunteer activity, with the exception of cases

concerning the economic activity operated by these organizations (art. 104

paragraph 1 LCCCC);

4) non-governmental organizations and entities mentioned in art. 3 paragraph 3 of

the Act on Public Benefit and Volunteer Activity - on matters relating to the

implementation of the commissioned public task under the provisions of this Act

(art. 104 paragraph 1 LCCCC);

5) non-governmental organizations whose task is not to operate a business activity

- in cases of these organizations carried out in relation to social, scientific,

educational, cultural, charitable, self-help activity, the activity for consumer

protection, environmental protection and social welfare (article 104, paragraph 2

LCCCC).

An application for granting exemption from court costs must be submitted either

in writing or verbally for the record of the case in the court where the case is to

commence or is already pending. Restrictions on the time limit for submission of the

application for exemption from court costs only apply to land and mortgage register

proceedings. In this case, this exemption may only be made before submitting an

application for the entry in the land and mortgage register. However, if the application

for registration in the land and mortgage register is to be placed in the notarial act, the

exemption may only be made before the conclusion of the act. In this case, a late

application is dismissed as inadmissible, and it is not possible to apply for the re-

establishment of the time-limit. It should be noted that this exemption is repealed, if the

application for registration in the land and mortgage register is not made within three

months of service of the decision on the exemption from court fees.

With regard to natural persons, a statement including details of family status,

assets, income and sources of livelihood must accompany the application. If the

application is made verbally, this statement can also be submitted in this form for the

record of the case. An individual who does not have his place of residence within the

jurisdiction of the court in which the case is to commence or is already pending may file

this application at the district court with jurisdiction for their place of residence. That

court refers such an application to the competent court without delay.



The court, recognizing the application, may order an investigation to verify the

statements contained in the application if the circumstances of the case or the statements

of the opposing party have made the court raise doubts as to the real financial status of

the party requesting exemption from court cots or benefiting from it (art. 109 paragraph

1 LCCCC). This applies equally to when the statement is unclear, as well as when in the

opinion of the court the information contained in the statement is incomplete.

Conducting such an investigation is all the more reasonable that these ambiguities or

omissions should not cause detrimental effects for the party, if they manage to be

removed as part of this investigation.

The court declines the application if it considers that there are no grounds to

grant the exemption, i.e. non-existence of the poor financial situation of the party as

well as when it finds the claim or the defence of rights unfounded. In case of rejection

of an application for exemption from court costs, the party can request the exemption

again, but only based on circumstances different than those that justified the rejected

application. A subsequent application for exemption from court fees based on the same

circumstances is rejected, and the decision in this matter is not subject to lodging an

appeal by way of complaint.

The court may modify its decision on the exemption from court costs in the

event of a change in circumstances that formed the basis of the exemption or in the

event of a declaration that those circumstances did not exist in reality. In such a case,

the party is obliged to cover all applicable fees and pay expenses. However, if the

change is the result of improvement in the economic situation of the party, the court

may charge the party with this obligation only partially, according to the changes that

have occurred in their status. If the party withdraws the action due to the fact that their

exemption from court costs has been withdrawn, the court does not collect unpaid fees

from them. It should be noted that this change in circumstances must be serious,

because a slight deviation from demonstrated financial values does not justify the

withdrawal of the exemption.

However, in situations where a party has obtained exemption from court costs on

the basis of deliberate misrepresentation of circumstances, the court, withdrawing the

exemption from court costs, imposes a fine of up to 5,000 PLN on them. Moreover,

irrespective of the obligation to pay the fine, the party should pay all prescribed fees and

cover expenses charged to them. What is more, the person who re-applied for the

exemption from court costs, knowingly giving false facts about family status, assets,

income and sources of livelihood, is sentenced by the court, rejecting the application, to

a fine of up to 2,000 PLN (art. 111 LCCCC).

A category different than the withdrawal of the exemption from court costs is its

expiry. It occurs upon the death of the party to whom it was granted. Persons entering a

case in place of the deceased party are not automatically exempt from costs because

their deceased predecessor received such an exemption due to his financial situation.

Provisions for exemption from court costs by the court or the referendary (court

official) are not applied in electronic writ-of-payment proceedings (art. 104a LCCCC).



It should be stressed that although the exemption is to enable its holder to

enforce or defend his rights, this exemption, however, does not relieve the party from

the obligation to repay the costs of the suit to the opposing party. Where in the

proceedings one party or both parties benefited to a certain extent from the exemption

from court costs, there arises a problem of covering court costs, which the party had no

obligation to pay, in the event of closing the proceedings. Court costs which the party

had no obligation to pay are charged to the opponent by the court in the decision closing

the case of the instance, if there are grounds for it, with the appropriate application of

rules on reimbursement of the costs of the suit. In contrast, costs not charged to the

opposing party are ordered by the court (in the decision closing the case of the instance)

to be collected from - depending on the circumstances - the claim awarded in favour of:

a) the party whose action caused their existence;

b) the party replaced by a guardian ad litem or

c) the party, a person, against whom the Prosecutor brought legal action or

submitted a request for the initiation of action.

It is worth noting that exemption from court costs awarded to the party by the

court in examination proceedings, or from which the party benefits under the Act, also

extends to enforcement proceedings.

ESTABLISHMENT OF AN EX OFFICIO LEGAL

REPRESENTATIVE IN LITIGATION

This institution is designed to allow the party that is not able to cover the remuneration

costs of a professional representative to benefit from the assistance of such a

representative in situations where it is desirable for the provision of an adequate level of

protection of their rights in civil proceedings.

In accordance with the provisions of the Code of civil procedure (hereinafter

CCP) a party has the right to submit, in writing or verbally for the record of the case, a

motion for the appointment of an attorney or legal counsel. The party files this motion

in the court where the case is to commence or is already pending. If the applicant does

not have his place of residence within the jurisdiction of the court, he may file this

motion at the district court with jurisdiction for their place of residence and that court

refers the application to the competent court. If a party files the motion for the first time

at the stage of appellate or cassation proceedings, this court may refer the case to be

examined by the court of first instance.

At the same time, it needs be considered as a principle that the court’s

appointment of an assigned attorney (legal counsel) ex officio may only occur at the

request of the party; however, waiving certain formal requirements may be agreed to, if

a party has filed the motion in an inapt manner, but one can read out of it a request to

the court to appoint an assigned attorney (legal counsel) (Z. Krzemiński, Adwokat w

postępowaniu cywilnym z wyboru i z urzędu, Kraków 1999, p. 93).



It needs to be remembered, however, that the circumstances of the party’s

inaptness should be examined very carefully as sometimes it may turn out to be the

party’s (the defendant’s) tactic, calculated at extending the case and obtaining a more

favourable outcome (especially if, for instance, the defendant does not have arguments

that could challenge the claimant's statements), which is pointed to by, inter alia, M.

Piekarski (M. Piekarski, Pozbawienie strony możności obrony swych praw w

postępowaniu cywilnym, Warszawa 1964, pp. 151-152). Appointing an attorney or legal

counsel ex officio constitutes one of the elements of legal protection of inapt persons.

The court accepts the motion on the appointment of legal representation ex

officio if it decides that the participation of an attorney or legal counsel is necessary. The

court requests the appointment of an attorney or legal counsel at the appropriate district

council of attorneys or the district council of legal counsels. If an attorney or a legal

counsel appointed in this way is to take any actions outside of the jurisdiction of the

adjudicating court, the appropriate district council of attorneys or district council of

legal counsels, at the request of the appointed attorney or legal counsel appoints, where

necessary, an attorney or a legal counsel from another town (art. 117 § 4 and 5 of the

CCP).

Similarly, a party benefiting from the exemption from court costs may apply, in

a mode set out in the Code of Civil Procedure, for the appointment on an attorney or

legal counsel, if, on the basis of a statement contained in the application, including

details of family status, assets, income and sources of livelihood, he shows that without

detriment to the upkeep of himself or his family, he cannot pay the remuneration of an

attorney or legal counsel. The court assesses said statement, considering whether it is

sufficient to appoint an attorney or legal counsel.

Appointing an attorney or legal counsel for the party is equal with providing

representation ad litem (art. 118 of the CCP). This does not mean, though, that this

appointment must not undergo any modifications during the proceedings, because it

would make it impossible for the court to react to the changes in circumstances

significant for the appointment of representation ex officio.

Most of all, the court revokes the appointment of an attorney or legal counsel if it

turns out that the circumstances under which it was granted did not exist or have ceased

to exist. In this case the party is obliged to cover the remuneration of an attorney or

legal counsel appointed for them. Moreover, if the circumstances under which the

assigned attorney or legal counsel were appointed have ceased to exist, the court may

charge the party with this obligation only temporarily, adequately to the change that has

taken place in his status. The party who was granted the appointment of an assigned

attorney or legal counsel on the basis of consciously submitting false circumstances is

sentenced by the court to a fine, regardless of their obligation to pay attorney or legal

counsel remuneration (art. 120 of the CCP).

It needs to be noted that in the case of the appointment for the party of an

attorney or legal counsel ex officio, the legislature requires the court to consider the



purposefulness of attorney participation on the case according to the state of the case at

the time the motion is filed. The recognition by the court that the participation of

professional representation in the case in necessary is not subject to subsequent

reassessment and is binding for the court in the sense that the court cannot in the same

case change its decision on appointing a representative if there has been no change in

circumstances which constitute the conditions for granting representation ex officio. The

court in this regard acts ex officio and is not bound by the position of the party itself,

even if they submit, for instance, a statement waiving their right to an attorney.

Regulations do not provide for such an application because the withdrawal of an

entitlement is only conditioned on the initial non-existence of or a change in

circumstances justifying it.

It should be noted, however, that the inadmissibility of such a motion does not

close the party's possibility of applying for a change of the attorney assigned to them if

they think that he performs his duties improperly. Furthermore, the fact that the party is

of such a position may constitute a prerequisite for the attorney to request exemption

from the obligation to represent the party in the proceedings and the appointment of

another representative.

Moreover, the appointment of an attorney or legal counsel terminates with the

death of the party who was granted it. However, by way of this appointment, an attorney

or legal counsel, after the death of the represented, takes procedural actions that are

urgent. Thereby, the possibility of passing of the attorney or legal counsel onto the heirs

of the party for which he was appointed is excluded. Heirs may file such a motion

independently, but then it will be considered in isolation from the situation of the

deceased, and only on the basis of facts concerning the heirs. In addition, an attorney or

legal counsel may, for important reasons, apply for exemption from the obligation to

represent the party in the proceedings. In this case, the competent authority of the

professional association, while releasing one attorney or legal counsel from the

obligation, at the same time appoints another.

An attorney or legal counsel appointed in this mode has the right – with the

exclusion of the party – to claim the amount eligible as remuneration and

reimbursement of expenses from the costs awarded to the party from the opposing party.

The opposing party, though, cannot make any deductions, except for costs awarded

mutually to him from the party for which the attorney was appointed.

The decision to appoint, refuse to appoint and revoke the appointment of the

attorney or legal counsel and also to charge a fine and the obligation to cover their

remuneration may be issued by the court in a closed session. The decision to appoint or

refuse to appoint an attorney or legal counsel may also be issued by a court referendary

(court official).

In accordance with art. 124 of the CCP, filing a motion for the appointment of an

attorney or legal counsel ex officio, as well as lodging a legal remedy for the refusal of

their appointment does not suspend the pending proceedings unless it regards the

appointment of an attorney or legal counsel for the claimant as a result of a motion filed



in the lawsuit or before the action is brought. The court may, however, withhold

adjudication until the final and valid decision on the motion is issued, and therefore not

set a hearing and cancel or postpone the already set hearing.

Reform

In the previous state of law in the Polish civil procedural law two circumstances

justifying the establishing of a court-appointed attorney needed to appear conjointly:

1) court’s exemption of the party from court costs, in whole or in part;

2) court’s recognition of the need to establish in this mode a professional

representative for the party (art.117 § 4 of the CCP).

A significant change in this model of legal assistance was introduced by the ruling of

the Polish Constitutional Tribunal which stated that art. 117 § 1 of the CCP, in the part

including the phrase "exempt by the court from court costs, in whole or in part", does

not conform to art. 45 paragraph 1 and art. 77 paragraph 2 and art. 32 paragraph 1 of the

Constitution (CT judgement of 16.06.2008, P 37/07, OTK-A 2008, No 5, item 80). The

Constitutional Tribunal clearly stated in its deliberations that combining the exemption

from court costs with the admissibility of appointing a court-assigned attorney or legal

counsel may give rise to negative procedural consequences for the party that needs legal

assistance, because of, for instance, their inaptness.

As an example of such a situation a condition was pointed out – that the

legislator, by using the criterion of the prior exemption from court costs, discriminates

between, for instance, the situation of the defendant, who does not need to bear costs

when lodging an opposition to the order for payment and that of the claimant who is

required to pay a fee on the claims filed in the order for payment in the writ-of-payment

proceedings; the claimant's position who, when bringing a suit, is required to pay a fee,

and the defendant’s position, who, when submitting the answer to the lawsuit, does not

incur any fees; entities filing for procedural actions involving some expenses or not

related to any expenses at all. In this way, the legislator discriminates against indigent

persons in terms of access to court-assigned legal assistance depending on their

procedural position, the type of procedural measures submitted and procedural actions

undertaken. As a consequence of said ruling it was made possible for equal treatment by

the courts of all those who need to be assigned an attorney (legal counsel) without

differentiating between their situations depending on the fact whether they are exempt

from court costs ex officio or not (also CT judgement of 16.06.2008, P 37/07, OTK-A

2008, No. 5, item 80.)

Such an approach to the problem of court-assigned professional representation is

not only a manifestation of a new approach to the issue of the right to justice (in terms

of real access to justice), but also a continuation of the long established view, that an

attorney (in the current state of law, also a legal counsel) plays, in the interest of the

party, the remarkably important role of an interpreter of the little communicative legal

language prawniczego (E. Wengerek, Dostępność procesu cywilnego w krajach



socjalistycznych, Palestra 1977, No 11, p. 10), and thus - his participation in a civil suit

should be as common as possible.


The Polish legal system does not have any statutory solutions, or other generally-

shaping insurance standards for legal aid (for example, there is no minimum "basket" of

costs and benefits that should be covered by the insurance). Therefore, the following

information refers to the most commonly occurring offers in this respect, that - due to

the nature of things, because of the principles of competition in the insurance services

market - are varied.

An offer from commercial insurance companies in this regard is only being created

and developed. The Commission for External Image and Pro Bono Activity of the

Supreme Bar Council, together with the Insurance Ombudsman and the (Civil Rights)

Ombudsman, conduct an educational and social campaign popularizing legal protection

insurance as an instrument for ensuring broad and affordable access to justice. It was

only in October 2011 that the Supreme Bar Council signed the first agreement with an

insurer, specifying rules for cooperation between the two entities and the principles on

which Concordia will be reimbursing the insured for attorney's fees. Negotiations by

legal corporations with other insurers are taking place.

Legal protection insurance in principle (in a standard form) is principally the fact

that the insured, in exchange for a premium, will be reimbursed by the insurer for:

1) the costs of an attorney’s or legal counsel’s remuneration (the choice of the Law

Firm lies with the Insured, the Insurer may recommend a Law Firm), covering

court costs (from the suit, to appellation, to costs of expert witnesses, etc.),

2) the reimbursement of costs of the opposing party (awarded by a court decision in

the event of the loss in court),

3) the costs of execution proceedings,

4) the costs of necessary notary actions and of translation of document necessary

for the protection of public interest,

5) the costs of legal advice or written legal opinions.

In extended versions additional options appear, such as:

1) the costs of the arbitration court,

2) the costs of independent valuers in pre-court proceedings,

3) the costs of proceedings before courts of foreign countries in the territory of

the European Union, including costs of a foreign court.

The offer lists legal protection insurance in various variants:

A – legal protection costs insurance in personal life;

B - legal protection costs insurance associated with the property;

C - legal protection costs insurance in matters of road traffic.



Currently, legal protection insurance for now is at the margin of Polish legal

transactions, as less than 1% of Poles have such insurance. In addition, the experience

of insurance companies shows that over 95% of the beneficiaries of policies do not

have their own legal representative and ask the insurer for help in choosing one. This

is mainly due to the fact that Poles rarely use the services of lawyers. Research carried

out on behalf of the Supreme Bar Council by SMG/KRC in February 2010 shows that

in the last five years only 19% of Poles benefited from legal services. The study also

showed that 91% of respondents did not use legal assistance because they did not think

they needed it. Only 5% said they did not have enough money108

. This trend continues,

as in 2013, in a similar study, 86% of Poles declared that they did not use the services of

lawyers at all, of which 99% say there is no need for it109

.

Offers of individual insurers (to a varying degree depending on the amount of

insurance premiums) declare not to cover legal protection costs:

1) of insurance-involving accidents caused by the Insured wilfully;

2) in disputes where the party in the Insured’s relative;

3) related to the behaviour of the Insured after the ingestion of alcohol, drugs,

medications or other substances that exclude or limit the ability to recognize the

importance of the act or control their conduct;

4) resulting from acts of war, riots, riots, demonstrations, strikes, lockouts or acts

of terrorism;

5) resulting from public law orders directed to a larger group of people in

connection with the state of emergency or another exceptional situation of the

country;

6) related to occupational diseases;

7) from insured accidents which occurred outside the territory of the Republic of

Poland, unless the parties have agreed otherwise;

8) related to the occupation performed by the Insured;

9) in matters of:

a) press law and personal rights protection law,

b) copyright law, industrial property rights law, patent rights law,

c) tax law, fiscal law and customs law,

d) labour and social security law,

e) bankruptcy law or restoration law,

f) family law, guardianship law and inheritance law,

g) geological and mining law,

h) commercial law, bonds law and securities law.

Also excluded from the insurance cover are the costs:

1) of legal services performed by persons who are not attorneys or legal counsels;

108

http://www.rzu.gov.pl/files/20104__5185_Ubezpieczenie_ochrony_prawnej_prawnik_dla_przezornego_P

olaka__Warszawa_16_maja_2011_r_.pdf, 15.01.2014 .

109

http://prawodlaprzedsiebiorczych.pl/dlaczego-warto-korzystac-z-uslug-adwokata/, 15.01.2014.

http://www.rzu.gov.pl/files/20104__5185_Ubezpieczenie_ochrony_prawnej_prawnik_dla_przezornego_Polaka__Warszawa_16_maja_2011_r_.pdf

http://www.rzu.gov.pl/files/20104__5185_Ubezpieczenie_ochrony_prawnej_prawnik_dla_przezornego_Polaka__Warszawa_16_maja_2011_r_.pdf

http://prawodlaprzedsiebiorczych.pl/dlaczego-warto-korzystac-z-uslug-adwokata/



2) of cases where the Insured knowingly provided false or misleading information,

or provided formally and legally fraudulent or flawed documents;

3) of cases where the Insured knowingly concealed information or documents that

may have an impact on the course of provision of legal aid or the course of

proceedings;

4) whose total amount does not exceed PLN 200;

5) in matters of pursuing claims from receivables that have been assigned to the

Insured or assumed by him;

6) of the commute of the Insured’s representative to the hearing;

7) equivalent to the loss of earnings due to appearance in court.

The insurance premium is determined based on the premium rates applicable on the date

of conclusion of the insurance contract, and the amount depends on:

1) the length of the insurance period;

2) the scope of insurance;

3) the territorial scope;

4) the insurance sum;

5) the amount of contribution;

6) the frequency of instalment payment;

7) the previous course of insurance;

8) the Insured’s contribution period with a given Insurer;

9) individual risk assessment.


Polish law does not provide for contingency fee agreements, quite the contrary,

they are inadmissible.

According to § 29 of the Code of Ethics of Legal Counsels, the remuneration

included fees and expenses. The rules for determining the amount of remuneration

should be agreed with the client prior to the provision of legal assistance. The amount of

remuneration shall be determined taking into account in particular the necessary amount

of work, place of supply of services, the degree of difficulty and complexity of the case

or the task requiring expertise, the importance of the case for the client that the case

concerns. A legal counsel must not conclude an agreement with the client, pursuant to

which the client agrees to pay a fee for its conduct only in proportion to the result

achieved (pactum de quota litis). It is permitted, though, to conclude an agreement

which provides for an additional fee for the successful outcome of the case.110

As to the

latter kind of remuneration, no statistics are being collected, treating it as an element of

an internal relationship between the counsel and the client.

Similarly, in § 50 of the Code of Professional Ethics and Dignity of the Bar found

that in financial matters, the attorney is bound by particular scrupulousness in relation to

110

http://www.kirp.pl/Akty-Prawne/Kodeks-Etyki-Radcy-Prawnego, 15.01.2014.

http://www.kirp.pl/Akty-Prawne/Kodeks-Etyki-Radcy-Prawnego



the client. An attorney has a duty to inform the client of the amount of the fee or the

manner of its calculation (e.g. based on time worked). It is unacceptable for an attorney

to conclude a contract with the client which would provide for the obligation to pay a

fee for the conduct of the case depending entirely on the final outcome of the case. An

attorney can conclude a contract providing for an additional fee for a positive outcome

of the case.

Third Party Funding

The Polish legal system does not have legal structures for third parties (such as

special purpose funds, NGOs) financing access to justice and participation in court

proceedings. If such cases occur in practice, they are the subject of internal

arrangements between the funder and the recipient.

Other Mechanisms

Since the beginning of the twenty-first century one has been able to see the

problem and the need to create a coherent system of free legal aid as part of an effective

social policy. But so far it works without any clear legal basis and is limited to

university legal clinics and community initiatives, relating primarily to the activities of

non-governmental organizations aimed at particular groups in need (e.g. victims of

domestic violence, single mothers, etc.). Over some recent years, various projects

relating to the system of free legal aid, based on a variety of legal, organizational and

financial solutions, have been appearing. The latest project relates to the amendments to

the act on commune self-government through the introduction of a construction where

providing free legal aid to the poorest in terms and conditions laid down in this Act will

be the municipality’s own task. Free legal aid will be granted to indigent people (the

poorest) primarily those covered by social assistance and will cover legal assistance in

the pre-court stage in the form of, inter alia, legal advice, opinions, and, if necessary,

drafting pleadings to the court, to a public authority or to another entity (the so-called

basic legal aid). Exclusion covers here issues of parties’ legal representation and

representation in litigation. Legal aid will be granted, therefore, only in the primary

form. What is more, the range of legal aid assumed in the project has been left to the

discretion of each of the municipalities. In the simplest assumption, legal assistance

may be provided by a legal counsel or attorney employed at the headquarters of the

municipal office (e.g. on the basis of duty hours at a specified time). The proposed

regulation will be financed from the municipal budget, which will cause the variations

in the quality and scope of legal assistance provided depending on the wealth of the

community.

As part of conducted social consultation, justified negative opinions occur that

the project does not create a systemic solution postulated by NGOs of the social

problem observed. It neither determines directly the rules, nor the procedure for

granting legal aid for the poorest, financed by public funds. It also omits the existing

forms of provision of such assistance, also those of an extra-judicial nature, including

the role of universities (the so-called legal clinics), NGOs and professional associations.

In the practice of social life these entities fill the gap perceived by the project initiator



and create a specific system for the provision of legal aid. The project should notice

these phenomena and create designs that allow the connection of existing solutions with

the designed one.



Prof dr Danie van Loggerenberg SC and Mr F Haupt (South Africa)


Prof dr Danie van Loggerenberg SC

Mr F Haupt*

NATIONAL REPORT: REPUBLIC OF SOUTH AFRICA

1. INTRODUCTION:

In South Africa, where post-apartheid the Constitution of the Republic of South Africa,

1996, reigns supreme, the right of access to justice in civil cases is guaranteed in the

Bill of Rights embodied in the Constitution, section 34 whereof provides:

“Access to courts

34. Everyone has the right to have any dispute that can be resolved by the

application of law decided in a fair public hearing before a court or, where

appropriate, another independent and impartial tribunal or forum.”1

In our new dispensation the state is required to “respect, protect, promote and fulfil” the

rights in the Bill of Rights2 which rights, as stated above, include the right of access to

courts. In other words, the state is constitutionally required “to lead by example”.3

The question arises, as far as South Africa is concerned, what is happening to the right of

access to justice embodied in the Constitution as far as legal aid and alternative solutions

thereto are concerned.

This question will be addressed in the following context:

2 Background;

3 Legal aid;

* National Reporters: Prof dr Danie van Loggerenberg SC (Extraordinary Professor of Law, University

of Pretoria, Pretoria; member of the Pretoria Bar) and Mr F Haupt (Director: Legal Aid Clinic,

University of Pretoria, Pretoria; attorney). Date of submission: 30 June 2014. 1 The Bill of Rights also guarantees other fundamental rights, for example, the right to equality in section

9(1) thereof: “Equality 9.1 Everyone is equal before the law and has the right to equal protection and

benefit of the law.” Section 28(1)(h) of the Constitution provides as follows: “Every child has the right to

have a legal practitioner assigned to the child by the state, and at state expense, in civil proceedings

affecting the child, if substantial injustice would otherwise result.”

See also section 14 of the Children’s Act 38 of 2005 which provides that every child has the right to bring,

and to be assisted in bringing, a matter to a court, provided that matter falls within the jurisdiction of that

court. 2 Section 7(2) of the Constitution.

3 As was held by the highest court of the land, the Constitutional Court, in Mohammed v President of

South Africa (Society for the Abolition of the Death Penalty in South Africa and Another Intervening)

2001 (3) SA 893 (CC) at para 68.



4 Legal expenses insurance;

5 Contingency fee agreements;

6 Third party funding;

7 Mediation;

8 Conclusion.

2. BACKGROUND

Any discussion on access to justice and legal aid (including the alternative

solutions) has to take into account one startling fact: South Africa has the worst Gini

coefficient in the world, in other words, it is one of the most unequal societies in the

world from a socio-economic perspective.4 According to the World Bank data for

2009-2013, South Africa has the highest coefficient, namely 63.1.5

The discussion has to take into account, further, that access to justice in South

Africa has commonly come to be defined as legal representation in criminal matters.6

Such an understanding is, obviously, unacceptable as it is neither reconcilable with the

right of access to justice embodied in this Constitution (and the state’s constitutional

obligation to respect, protect, promote and fulfil the rights in the Bill of Rights), nor

adequate to cover the needs of the poor to realise their economic and social rights.7

4 The Gini coefficient aggregates the gaps between people’s incomes into a single measure. Thus, if

everyone in a group (or, for that matter, in a country) has the same income, the coefficient will be nil. If

all the income goes to one person and none to the rest, the coefficient will be 1. A Gini coefficient of 0

represents perfect equality, while a coefficient of 100 implies perfect inequality. See further

en.wikipedia.org/wiki/Gini_coefficient. 5 data.worldbank.org/indicator/SI.POV.GINI.

6 See Holness “The Constitutional Justification for Free Legal Services in Civil Matters in South Africa”

2013 (2) Speculum Juris 1 at 3. 7 See Van As “Taking Legal Aid to the People: Unleashing Local Potential in South Africa” 2005 Obiter

187; Vavda “Access to justice: from legal representation to promotion of equality and social justice –

addressing the legal isolation of the poor” 2005 Obiter 234 and Allen “Focussing legal aid on criminal

defence marginalises women’s legal service needs” 1995 South African Journal of Human Rights 143.

Muralidhar “Legal Aid Practises: Comparative perspectives” 2005 Obiter 264 contends that criminal

legal aid is intrinsically more necessary than civil legal aid due to factors such as the severe consequences

(for example loss of liberty) in criminal cases and the complex laws and procedures of criminal trials.

This argument not only loses sight of the fact that access to justice in civil cases is guaranteed in the

Constitution, but also of the severe consequences (for example losing one’s home in civil eviction or

execution proceedings or being unable to defend a case of reckless credit in an instance of an exploited

borrower) in civil cases. See further, in this regard, Holness, supra, at 4-5 who contends (correctly, it is

submitted) that the complexity of South African civil procedure could be said to be equally if no more

complex than its criminal procedure.



Lastly, the discussion has to take into account that throughout the years the

attempts by those concerned to make civil litigation less costly and the courts more

accessible to a far greater number of people was, and still is, primarily focussed on the

process for resolution of civil disputes and the various rules of court.8

3. LEGAL AID:

Legal aid is available to litigants in civil disputes through, mainly:

3.1 Legal Aid South Africa (“LASA”);

3.2 Legal Aid Clinics at various universities;

3.3 Pro bono assistance and representation by legal practitioners.

3.1 LASA

LASA is an independent statutory body established by the Legal Aid Act 22 of 1969.

Its aims are to:

give legal aid or to make legal aid available to indigent persons within its

financial means;

provide legal representation at state expense, as set out in the Constitution and

relevant legislation giving content to the right to legal representation, at state

expense.9

The Legal Aid Act requires the board of LASA, in consultation with the Minister of

8 Thus, for example, during 2010 the South African Government, via the Office of the Chief Justice,

embarked upon an attempt to address the need for reform. In a statement on the Cabinet Meeting that was

held on 5 May 2010 the following is said: “Cabinet discussed the Civil Justice Reform Project that seeks to

improve the efficiency of the civil justice system. The primary objective of the project is to provide a speedy,

affordable and simple process for resolution of civil disputes. The terms of reference for the project will

entail investigation of the following elements: increasing the effectiveness of the civil courts; the impact

and effectiveness of the current legislation on the civil justice system, simplification of court procedures and

processes, modernisation of the court’s system; effective case management; and harmonisation of the

court rules.”

See further Van Loggerenberg “Evolution of the powers of the judge and the powers of the parties regarding

taking of evidence”, paper delivered at the Inter-University Centre, Dubrovnik, May 2013. 9 During the first 20 years of its existence, LASA provided legal aid by means of Judicare, in other words,

it employed the services of lawyers in private practice to represent those needing legal aid. In 1997,

LASA decided to move towards a system of salaried legal practitioners as the primary means by which

legal aid would in future be provided. In the last few years, LASA established at least 32 Justice Centres,

which provide legal aid throughout the country. The Justice Centres are usually near courts and each

centre serves between 10 and 20 courts. Through these centres legal aid to approximately 737,000

people is provided each year (www.legal-aid.co.za-abriefhistory).



Justice and Constitutional Development, to set out the details of the policies and

procedures for the provision of legal aid in a guide called the Legal Aid Guide.10

In

respect of civil cases the Guide provides, inter alia, as follows:

Legal aid is not available to persons who can afford their own legal representation.

The affordability of legal representation depends on the person’s means and the

costs of the legal representation (para 4.1);

A means test determines if a person is indigent for purposes of being afforded legal

aid (para 4.1);

A litigant who is indigent in a civil case will only be granted legal aid if the matter

has prospects of success on a balance of probabilities. This depends on the

availability of resources where substantial injustice11

would otherwise result (para

4.1);

Legal aid in civil cases is, as a general rule, granted to:

o all children resident in South Africa;

o any indigent person who qualifies for legal aid under the Guide and who is both

physically resident in the Republic of South Africa and a citizen or permanent

resident of the Republic of South Africa (para 4.2).12

No legal aid is provided for litigation in any foreign court (para 4.2);

Legal aid is available only in certain specified cases (paras 4.9 to 4.20, a copy of

which is annexed hereto, marked “A”).

The Legal Aid Act does not define “indigent persons” for purposes of legal aid.

LASA has, however, laid down a means test that is revised from time to time. The

means test determines indigence for the purpose of considering legal aid. This aspect

is dealt with in Chapter 5 of the Guide, a copy of which is annexed hereto, marked “B”.

According to the performance results for the 2012/2013 financial year published by

10

The 2014 Guide, which consists of 408 pages, is electronically accessible at www.legal-aid.co.za/wp-

content/uploads/2012/03/Legal-Aid-Guide-2014.pdf. 11

In this regard the following criteria is laid down in para 4.9 of the Guide: (a) The seriousness of the

issue for the person, for example, if the person’s constitutional rights or personal rights are at risk. (b)

The complexity of the relevant law and procedure. (c) The ability of the person to represent

himself or herself effectively without a lawyer. (d) The financial situation of the person. (e)

The person’s chances of success in the case. (f) Whether the applicant has a substantial

disadvantage compared to the other party in the case. Where the aforesaid criteria is met, the applicant for

legal aid should get legal aid as long as LASA has the necessary resources and the other requirements of

the Guide are met. 12

In terms of para 4.2 of the Guide, the National Operations Executive of LASA may grant legal aid in

exceptional circumstances if the issues in a case are justiciable in a court of the Republic of South Africa,

but the legal aid applicant is not physically resident in South Africa (para 4.2.1).



LASA in Umlungisi March 2014, legal aid showed a 7.8% growth (compared to the

previous year) in the number of people assisted. In this regard 438,844 new clients

were rendered legal assistance and 297,835 were assisted with general legal advice, 87%

of which were in criminal matters and only 13% in civil matters.13

LASA’s budget allocations received from the state for the financial years 2008/2009 to

2011/2012 were as follows:14

Financial year Budget allocation

2008/2009 R869,511.083

2009/2010 R917,408.000

2010/2011 R1,141,335,871

2011/2012 R1,156,057.00

In LASA’s report to the ILAG Conference, Helsinki, June 2011, the following was

concluded:15

“Our presence in civil matters are however limited although we believe that the

demand for this service is very great. A number of proposals have been made

to the state for increased funding to enable us to increase our coverage of civil

matters to clients.”

At the time of writing this report, we were not aware of any increased funding having

been made available to LASA by the state to increase legal aid in civil cases.

3.2 UNIVERSITY LEGAL AID CLINICS

Historically, university law clinics and in a sense clinical legal education itself

emerged in South Africa, in the 1970 and 1980’s, largely as a response to the unmet

need for legal services in the community. Clinics, then generally known as legal aid

clinics, were initially founded, managed and staffed by students on a voluntary basis,

with some supervision by private practitioners or faculty members. Gradually, and at an

uneven pace, the university law clinics evolved from voluntary pro bono work (where

students, without fee, reward or academic credit, provided or assisted in the provision of

services that provided or enhanced access to justice for low income and disadvantaged

people) to statutorily recognised structured legal aid providers staffed by attorneys and

candidate attorneys and assisted by students enrolled for academic credit carrying

subjects.

13

According to the 2011 South African Census Report, the population increased from 40,5 million in

1996 to 51,8 million in 2011. 14

LASA report dated May 2011 tabled at the ILAG Conference, Helsinki, June 2011. 15

Para 9.



Presently, we have law clinics attached to all nineteen law faculties in South

Africa.16

Of the nineteen clinics, only two are simulation clinics whilst the remainder

all attend to “real life” clients. After years of lobbying amendments to the Attorney’s

Act17

was brought about in 1992. In terms of these amendments, articled clerks were

now permitted to serve their mandatory vocational training (articles) at legal aid clinics

and public interest law organisations. The result was that a critical key to access to the

legal profession as well as increased representation of clients was now found within the

law clinics attached to university law faculties.18

Of the nineteen law clinics, twelve offers clinical legal education as a

compulsory subject, six as an elective subject and one runs a volunteer clinic19

. The

clinics vary tremendously regarding size and resources, ranging from a clinic with one

clinician/supervisor to a clinic employing fourteen full time attorneys, nineteen

candidate attorneys and six administrative staff members.

80% of the cases attended to during 2012 (latest available statistics) were civil

cases. The types of civil cases attended to are as follows:

Divorces 18%

Housing matters including eviction 12%

Labour related matters 12%

Domestic violence 10%

Consumer law related matters 7%

16

UKZN Law Clinic, Durban; Univen Law Clinic, Thohoyando; Nelson Mandela Metropolitan

University Law Clinic, Port Elizabeth; North West University Community Law Centre, Potchefstroom;

Rhodes University Law Clinic, Grahamstown; UCT Law Clinic, Cape Town; University of Johannesburg

Law Clinic, Johannesburg; University of Limpopo Campus Law Clinic, Polokwane; North West

University Law Clinic, Mafikeng; University of Pretoria Law Clinic, Pretoria; UWC Legal Aid Clinic,

Belville; Wits Law Clinic, Johannesburg; Stellenbosch Legal Aid Clinic, Stellenbosch; UFS Law Clinic,

Bloemfontein; University of Fort Hare Law Clinic, Alice; University of Kwazulu-Natal Law Clinic,

Pietermaritzburg; University of South Africa law Clinic, Pretoria; The University of Zululand Centre for

Legal Services, Empangeni; Walter Sisulu University Law Clinic, Mathata. Half of these clinics also have

satellite or branch offices, mostly in rural areas. 17

53 of 1979. 18

The requirements of the Law Society that had to be met to enable clinics to be accredited for the

purpose of registering contracts of articles further assisted in professionalising clinics. The relevant rules

stated: “If any attorney in the full time employment of a law clinic wishes to engage a candidate attorney

under articles of clerkship may do so only if – the candidate attorney is to be under his direct personal

supervision or under the direct personal supervision of another attorney who is a member of the

professional staff of the clinic; the clinic is open for business during normal business hours for not less

than 11 months in any year; the clinic has proper office systems with telephones, typing facilities, files

and filing procedures, a diary system and at least elementary library facilities; the clinic has a

bookkeeping system and accounting procedures; the clinic handles a reasonably wide range of work to

give the candidate attorney exposure to the kind of problems that a newly qualified attorney would expect

to encounter and be able to handle competently during his first year of practice. The Council shall have

the right to direct the clinic to require the candidate attorney to attend a training course approved by the

Council in areas of practice which, in the opinion of the Council are not adequately dealt with by the

clinic.” 19

University of South Africa which offers distance education.



Contract matters 5%

Succession wills estates 4%

Other family law related matters 4%

Maintenance court 3%

Custody 2%

Refugee law related matters 1%

Only thirteen of the nineteen clinics responded to a questionnaire enquiring about the

number of cases handled during 2012. The totals of these thirteen clinics are as follows:

Number of cases carried over from 2011 6 433

Number of new cases taken on in 2011 9 880

Total 16 313

Number of files closed 8 409

In addition to these, advice only (i.e. no file opened) was given to 10 452 clients.

Legal services rendered by the clinics are free of charge, save for a contribution by

clients in respect of direct disbursements, i.e. sheriff fees or costs of legal

advertisements.

Clinics are also involved in backup legal services to community based paralegal advice

officers, skills training of paralegals, community legal and democracy project education

as well as advisory services to NGO’s etc.

Bearing in mind that the above statistics regarding number of cases are from twelve of

the seventeen clinics involved in providing legal services. It can be said that university

law clinics remain an important contributor to the provision of civil legal aid to the

indigent.20

3. PRO BONO LEGAL SERVICES

The current position in South Africa is aptly described as follows by Holness:21

“4 Current position in South Africa

Presently in South Africa, mandatory pro bono work is theoretically part of the

rules of each of the constituent provincial law societies and the various bar

councils.22

A refusal by any attorney to perform his or her pro bono service

20

A so called “means test” is used. This corresponds to a large extend with the “means test” used by

Legal Aid South Africa. 21

“Recent developments in the provision of pro bono legal services by attorneys in South Africa”

Potchefstroom Electronic Law Journal [2013] EER 5. 22

South Africa has a system of attorneys (solicitors) and advocates (barristers).



hours without good cause will be regarded as unprofessional conduct. The

word theoretically is added as there has been very little enforcement of this

requirement and to date there has been no report of an attorney having been

disciplined for failing to undertake pro bono work. Pro bono work was initially

mandatory only for attorneys practising in the three Cape provinces. In 2003

the Cape Law Society introduced a minimum requirement of 24 hours a year of

mandatory pro bono work. In subsequent years almost identical rules have

been adopted countrywide. For example, Rule 27 of the KwaZulu-Natal Law

Society provides for mandatory pro bono work by its members. Sub-rules 27.3

and 27.4 provide the approved structures through which pro bono work may be

offered. Notwithstanding the detail of Rule 27, no punitive consequence is listed

for failing to meet one’s pro bono obligations.

The hesitancy of the legal community in much of South Africa to embrace

mandatory pro bono work is well illustrated by the aforementioned situation in

KwaZulu-Natal. The KwaZulu-Natal Law Society has debated the issue of

mandatory pro bono service since 2002, but its members repeatedly voted

against the mandatory requirement, following the Cape model only in the

second half of 2010. Similarly, the Law Society of the Northern Provinces has

for a number of

years adopted the view that pro bono services would best be rendered by its

members on a voluntary basis.

However, it should also be noted that a number of South African law firms (most

notably the large, national firms) have mero motu undertaken to perform a great

deal of voluntary pro bono work. What follows is a description of the pro

bono work of certain South African firms of attorneys, and some analysis thereof.

The pro bono policy of Bowman Gilfillan attorneys commits all its lawyers to:

“... make significant contributions to assist poor or otherwise

disempowered persons to access justice and quality legal services; to the

development of the Constitution and constitutional jurisprudence; to the

clarification or resolution of legal matters of public interest and to the

creation of a positive public image of the attorneys’ profession, directly or

by co-operating with or assisting appropriate organisations or individuals.

In the financial year ended 28 February 2006, Bowman Gilfillan provided 8 432

hours of pro bono services at an average contribution of 34 hours per legal

practitioner from candidate attorneys through to senior partners. The value of

that contribution was in the region of R6.5 million for the financial year. More

recent statistics (admittedly from the firm itself) illustrate an even greater

commitment to pro bono work by this firm. Each professional member of staff,



from Directors to Candidate Attorneys, is expected to contribute an average of

50 hours to pro bono work every year. According to Bowman Gilfillan the

aforementioned 50 working hours per year of pro bono work for every

professional staff member amounts to about 1 000 hours a month across its

national offices – worth almost R1 million. Whilst not as impressive as the

recent 50 hours per professional staff member, there are impressive pro

bono statistics from the firm over the last decade. From June 2003 to February

2010 they reported contributing about 51 000 hours of pro bono work, worth an

estimated R43 million. This amounts to an average of about 30 hours per

attorney or candidate attorney per year. It is interesting to note that Bowman

Gilfillan’s model of pro bono service delivery involves each professional staff

member doing pro bono work, rather than the creation of a dedicated pro

bono department, which has been the route chosen by certain other large South

African firms. Whilst the appropriateness to other firms of the Bowman

Gilfillan-model of pro bono work could be debated at length, its commitment

to pro bono work generally is something to be emulated by other firms.

Another of South Africa’s largest firms of attorneys, Edward Nathan

Sonnenbergs (ENS), appears to have made a commitment to pro bono work well

in excess of law society expectations. It has committed each of its attorneys to 32

hours per attorney per calendar year and pro bono hours cannot be traded for

other work done. As with the Bowman Gilfillan model, ENS has taken the route

of its entire professional staff making a contribution to pro bono work rather

than dedicating one department to the task. However, ENS has taken the bold

and logical step of making its pro bono work more geographically accessible to

indigent communities. This it has done by establishing a satellite office in

Mitchells Plain (on the so-called "Cape Flats"). The Mitchells Plain office co-

ordinates the firm’s pro bono efforts through screening potential matters and

then assigning pro bono cases accepted to individual legal professionals at

ENS’s Cape Town offices. The firm reports that in just over a year it handled

about 250 pro bono matters, amounting to over 2000 hours of professional work

time. The Chairperson of ENS’s pro bono committee has noted the scepticism of

some as to such a pro bono model working within a firm’s other commitments.

Such sceptics, he says, believe such work can be "dangerously disruptive to a

busy commercial practice". The ENS response thereto has been to attempt to

make pro bono work part of its organisational culture through the hands-on

approach by each and every one of its professional staff. Similarities in this

regard may be drawn with the widespread inculcation of a pro bono culture

described above in American law firms.

Norton Rose South Africa has established a hybrid between a dedicated pro

bono department and a commitment by each candidate attorney or attorney to

perform some pro bono work. This it has done through the establishment of a

Public Interest (pro bono) Law Department at Norton Rose’s Johannesburg

offices. Concomitant with the dedicated department, each candidate attorney



and attorney is required to perform 24 hours of pro bono work per year.

Another of South Africa’s largest law firms, Webber Wentzel, has

approached pro bono work through establishing what is of essence in a pro

bono department (they term it a "Pro Bono Practice Group"). Webber Wentzel

have applied for and received funding to brief advocates in pro bono matters.

The firm lists particular advocates who have provided their services either free

or at a reduced rate in Webber Wentzel’s pro bono cases. The firm also works

closely with the legal non-governmental organisations ProBono.Org and the

Tshwaranang Legal Advocacy Centre (the latter’s focus is on the prevention of

violence against women) to perform pro bono work.

Although providing fewer specifics than the aforementioned large corporate

firms, BKM Attorneys in Johannesburg provides an example of a smaller firm

showing a commitment to performing pro bono work beyond any regulated

requirements to do so. BKM’s commitment to social responsibility is evidenced

through pro bonotargets for each year and the inclusion of those targets in their

annual management goals.

A significant development in the provision of pro bono work by private lawyers

in South Africa was the establishment in 2005 of the pro bono clearing house,

ProBono.Org. ProBono.Org, which is registered as a law clinic, seeks to match

civil clients with strong cases (in terms of both facts and law) who are unable to

afford the cost of appointing their own legal representatives with attorneys and

advocates who take on those matters on a pro bono basis. ProBono.Org’s

current focus areas are with refugees in South Africa, family law matters

involving children, and the legal problems of HIV-positive persons. A notable

limitation to ProBono.Org’s work lies in the fact that until late 2010 it had

offices in Johannesburg only. It has subsequently expanded through the opening

of an office in Durban; but has not yet opened offices outside of these two urban

centres. The organisation’s erstwhile National Director has identified certain

significant limiting factors to its work. These challenges include funding

limitations, identifying (with its limited staff and volunteers) sufficient

meritorious cases to match volunteer legal practitioners whilst at the same time

recruiting more attorneys willing to do pro bono work, and a hesitancy from the

constituent law societies not to control pro bono referrals.

Within the realm of labour law, a fairly recent development has been the

provision of pro bono legal services by the South African Society for Labour

Law (SASLAW) at the Labour Court one morning per week in Cape Town, Port

Elizabeth and Durban, and three mornings per week in Johannesburg.



From this section, on the status of pro bono work amongst South African

attorneys, it is clear that there has been some hesitancy on the part of the

organised profession to fully embrace pro bono work by its members.

Notwithstanding the shortcomings at a law society level, a number of the large

national firms have taken it upon themselves to set up quite extensive forms

of pro bono work by their professional staff. The two main forms which this pro

bono work in the large firms has taken are establishing exclusive pro

bono departments within the firm, or supposedly prescribing hour benchmarks

for each lawyer in every department. Finally, the work of the clearing house,

ProBono.Org, provides a very useful vehicle with which to harness the pro

bono potential of private law firms in a far more coordinated and controlled

manner.”

The rules of, for example, the Pretoria Society of Advocates (i e the Pretoria Bar)

contain the following provision as regards pro bono work:

“5.12.4 Pro Bono work

A local Bar Council may require its members to undertake pro

bono work on the basis that:

5.12.4.1 it allocates such work amongst its members on a basis that is fair,

reasonable, equitable and transparent;

5.12.4.2 where a member is required to take instructions from a person

who is not a practicing attorney, the provisions of rule 5.12.3

shall apply;

5.12.4.3 a member may recover fees in terms of a written contingency fee

arrangement lodged with and approved by the Bar Council prior

to the commence of the work.”

According to statistics held by the Pretoria Bar,23

pro bono work was undertaken in 159

cases during the period 10 November 2011 to 21 May 2014. Of these cases a large

number was unopposed divorces.

4. LEGAL EXPENSES INSURANCE

Legal Expenses Insurance (“LEI”) covers policyholders against the potential associated

with legal action. The only coherent information available about LEI in South Africa

23

The Pretoria Bar is, after the Johannesburg Bar, the second largest Bar in South Africa. At the time of

writing of this report its membership stood at 566.



is set out in a report by FinMark Trust24

dated February 2014, entitled “Legal Expenses

Insurance”.25

The following executive summary appears in the report:

“2 Executive summary

Legal expenses insurance covers policyholders against the potential costs

associated with legal action. There is no accurate data on the size of the current

market for the product. According to Finscope 2012 there are in the region of 571

000 adults who either have a policy in their name or are covered by someone else.

This appears to understate the true market size significantly; based on discussions

with larger providers and returns submitted to the FSB by LegalWise and Clientele,

it is estimated that there are roughly 1.5 million legal expenses insurance

policyholders. Assuming a little over one dependent per policyholder the total

current market is estimated at 3.2 million individuals.

According to FinScope 2012 the profile of Legal Insurance policyholders is skewed

toward the lower LSMs. In fact, the proportion of product users in LSMs one

through seven, at approximately 62%, is higher than any other insurance product

save for funeral insurance at 78%.

The typical offering comprises access to legal services, including ‘advice’ and

mediation as well as an insurance component covering large lump sum costs arising

from litigation. In general products cover civil, labour and criminal matters and

some providers cover aspects of family law. Common exclusions include pre-existing

matters, cases that are not deemed to have a reasonable prospect of success and cases

where the costs are too high relative to the value of the settlement. It is standard for

policies to cover a policyholder’s spouse and children and extended family can be

included for an additional amount.

While available products are broadly aligned and similarly structured, providers

have differentiated their offerings. Monthly premiums range between R35 and

R230 with benefits typically at one thousand times the monthly premium. The

amount covered is quoted on either an annual or per matter basis. Co-payments or

excesses are uncommon and where they do apply, they are generally low. There are

waiting periods for certain benefits; however legal advice is generally available

immediately.

The dominant player in the industry is LegalWise. Other large providers include

24

FinMark Trust is an independent trust based in Johannesburg and is funded primarily by UKaid from

the Department for International Development through its Southern Africa office. Its website is

accessible at www.finmark.org.za. 25

The report is accessible at http://www.finmark.org.za/wp-

content/uploads/pubs/Rep_legalExinsurance_2014.pdf.



Clientele, Legal & Tax, Hollard, Lipco, Lexcorp and FNB’s Justice 1st.Various

licensing arrangements and operating models exist. Some providers, including

LegalWise, Clientele and Hollard are registered short term insurers. Lipco and

Lexcorp are Underwriting Management Agents (‘UMAs’) who act on behalf of

short term insurers. Legal & Tax is a cell captive while FNB Life markets

Justice 1st as an intermediary of RMB Structured Insurance.

There are a number of unregistered products available. In some cases these are

offered as membership based schemes that offer access to legal services in return for

a monthly membership fee.

The table below summarises key parameters for a number of available products:



Table 1. Legal insurance product overview (Formal providers in blue, membership based offerings in red)

Product Underwriter

Entry level offering Premium offering

Monthly premium Cover Other matters covered Monthly premium Cover Other matters covered

Lexcorp Santam R35 R55 000 per annum Family R85 R100 000 per annum Family

Scorpion Legal (Entry Level)

Legal Expense R39 R45 000 per annum Only civil or only labour No Premium offering

Edgars / Jet legal plans Hollard R39 R50 000 per matter R59 R100 000 per matter

Legal Best New National R45 R45 000 per annum Family

R95 R95 000 per annum Family

Lipco3 Absa Short Term

Insurance R53 R60 000 per annum Family

R155 R200 000 per annum Family

Lawyers Voice4 New National, Gryphon

Underwriting Managers R55 R30 000 per annum

Family, Property, Estate,

Consumer, Vehicle, Housing,

Debt

R120 R100 000 per annum

Family, Property, Estate, Consumer,

Vehicle, Housing,

Debt

FNB Justice1st RMB Structured

Insurance R60 R60 000 per matter

Administrative

R190 R200 000 per matter Administrative

Lesaka Constantia Insurance

Company R60 R50 000 per annum Family No premium product

Scorpion Legal Legal Expense R63 R55 000 per annum Administrative R96 R110 000 per annum Administrative

Legal Defender Constantia Insurance

Company R65 R200 000 per annum Family Only one product offered

Legal Wise Legal Expense R67 R67 000 per matter R150 R150 000 per matter

3 Lipco acts as the underwriting manager for Telesure and Guardrisk

4 In 2013 the FSB investigated Lawyers Voice and determined that it contravened section 7(1) of the Short-term Insurance Act. The FSB fined the company R600 000. New

National became the Underwriter from 1 May 2013



Legal Expenses Insurance: 2013

Multisure Guardrisk R68 R70 000 per annum Family Only one product offered

Product Underwriter

Entry level offering Premium offering

Monthly premium Cover Other matters

covered Monthly premium Cover

Other matters covered

Legal Nexus Constantia Insurance Company

R79 R80 000 per annum Family R105 R120 000 per annum

Family

Legal Edge / Guard Centriq (cell captive) R80 R40 000 per matter Unclear from website R130 R90 000 per ma

matter Unclear from website

Legal & Tax Centriq (cell captive) R90 R105 000 per matter Family,

Vehicle R175

R175 000 per

matter

Family, Property,

Vehicle

Legalex Guardrisk R90 R45 000 per annum Family R110 R85 000 per

annum Family

My Lawyer5 Not Underwritten – FSB

investigating R99 R175 000 per matter

Family (contested

divorce included),

Vehicle

Only one product offered

Hollard Hollard R120 R120 000 per matter R200 R200 000 per

matter

Clientele Clientele R130 R130 000 per annum R230 R320 000 per

annum

Legal IQ6 No information available

Source: Provider marketing material and websites as at April 2013 (My Lawyer as at August 2013)

5 Following the publication of this report, My Lawyer confirmed they had obtained underwriting from Guardrisk as at 1 February 2014. This followed the receipt of

a fine of R200,000 from the FSB for not being underwritten by a registered insurer. See http://www.banking.org.za/index.php/media- events/new-

noteworthy/my-lawyer-fined-r200000-by-financial-services-board/

6 Following the publication of this report, Legal IQ obtained underwriting from Guardrisk as at the 1 February 2014. They confirmed the following

information: Underwriter: Guardrisk. Cover R170 000 per case. Monthly premium R85. Other matters - Family; Vehicle

http://www.banking.org.za/index.php/media-



The primary channels used to market products are call-centres (inbound and

outbound), sales representatives and worksite marketing Affinity-based marketing

is also common (i.e. Hollard underwrites legal expenses insurance products

offered by Edgars and Jet) and some providers use multi-level network marketing

(for example Clientele and Multisure).

Typically legal insurers employ ‘legally qualified’ staff who provides legal advice

and assistance as well as mediation services through call-centres and in some cases

walk-in servicing centres. Litigation services are outsourced as legal expense

insurers cannot employ practicing attorneys to conduct litigation in-house, a s it

is in contravention of existing legislation governing the legal profession as

administered by the Law Society of South Africa.

If litigation is required, these matters are commonly referred to panel attorneys

who are contracted by the legal expense insurer and provide services based on

negotiated rates linked to government-gazetted tariffs. These fees are

significantly lower than fees charged by a typical attorney. Attorneys provide

regular updates to the legal expense insurer on the progress of legal cases. In some

cases providers allow clients to select their own attorneys, who are remunerated

at the same rate as contracted attorneys. In such cases the client is personally

responsible for payment of any shortfalls.

Claims ratios1 in the legal insurance industry are significantly lower than the

average claims ratio for the short-term industry as a whole. According to the latest

available returns submitted to the FSB, LegalWise’s claims ratio is 10%, while

Clientele’s is 9%. The average for the short-term industry over the same period was

63%. The low claims ratio is primarily a reflection of the reporting conventions in

the industry; legal expense insurers only include costs associated with litigation

when calculating claims ratios while the costs of other legal services provided

by in-house legally qualified staff, including advise and mediation, are not

included. Based on discussions with providers if these expenses were included

a more comprehensive claims ratio including costs associated with providing

access to all legal services would be between 45% and 55% of premiums.

With regard to utilisation, between 0.9% and 2% of policyholders8 claim on their

policies each year (that is, they make use of the litigation benefit). However,

insurers estimate that around 20% of policyholders make use of legal services

provided by in-house legally qualified staff, including telephonic advice,

drafting legal documents and mediation in any given year. One major provider

1 The claims ratio is calculated as net insurance benefits and claims as a percentage of net premium income

based on figures from the income statement submitted to the FSB.



has monthly queries equivalent to around one fifth of its client base although the

data cannot clarify whether these are unique clients.

On average 12% of claims are rejected each year. The most common reason for

rejection is non- payment of premiums, accounting for 51% of rejections. The next

most common reason claims are rejected, accounting for around one fifth of all

repudiated claims, is that the case is deemed to have no reasonable prospects for

success. Policyholders can appeal to an internal committee if they believe their

case has merit, and can take the matter to the Short Term Insurance Ombud if

the appeal is unsuccessful.

2.1 Customer feedback

Three focus group discussions were held with existing policyholders to gather

qualitative demand side data on the perceived value derived by policyholders

from their legal insurance policies. In addition, one focus group discussion was

conducted with a group who did not have a legal expenses insurance product, with

the aim of assessing their views on the usefulness of the product. The income

profile of participants was slightly above the typical product user; over 80%

of participants had a household income in excess of R10 000 per month.

8 This is for the 2009 join cohort.

In general, feedback from policyholders was positive. They described benefits in

terms of peace of mind, and highlighted the sense of safety or protection they

feel as policyholders. The primary motivation for purchasing the product was the

high cost of legal services and the fear of not being able to access legal assistance

should a legal issue arise.

Those who had made use of their legal insurance product, including advice,

mediation and litigation services, were satisfied with the quality of legal services

they had received and the outcome of the legal matters they had referred to their

legal expenses insurer. Even policyholders who had not utilised any benefits were

satisfied with the product; they were confident that they would need to make

use of the policy at some stage and that when they did, the value of services

rendered would more than compensate for what they had paid in premiums.

In some cases, perceptions regarding the level of security provided by the product

were not aligned with the actual benefits stipulated by product providers in

policy contracts. Across the groups participants indicated that they seldom

read the terms and conditions of their legal insurance policies and were

often unaware of specific exclusions. Focus group participants did not understand

the financial and legal terminology used in policy documents. Given that the

income profile of the focus group participants was relatively high, it

would be reasonable to assume that if anything, actual levels of understanding



in the target market for the product are lower than those of focus group

participants.

As is often the case with specialist services, clients were unable to assess the quality

of legal advice or services provided either by in-house legally qualified staff, or

outsourced attorneys. Clients did not ask in-house staff what qualifications

or experience they had but believed they were knowledgeable and suitably

qualified. With regard to attorneys, policyholders relied primarily on aesthetic

proxies, such as the appearance of an attorney’s office, to assess quality.

The focus group discussions also explored awareness of regulatory oversight.

One participant mentioned the importance of registration, FAIS and the FSB.

Overwhelmingly however, the key indicators used to assess the legitimacy of an

insurance company were advertising, company reputation and the opinions of

close associates.

2.2 Regulatory review

The legal expenses insurance industry is currently governed by two key pieces of

legislation; the Short-term Insurance Act and the Financial Advisory and

Intermediary Services Act (‘FAIS’). In addition, the proposed Micro Insurance

Act and Treating Customers Fairly initiative are likely to impact on the industry.

While existing legislation offers some protection to policyholders, the review

highlighted that in many cases the specific features of the product are not

well catered for under the current framework. For instance, in line with the

Policyholder Protection Rules, policyholders must be made aware of their right to

approach the Ombud in the event of a dispute. However, they are not

necessarily informed of their right to approach the Law Society or Bar Council if

they believe their attorney or advocate has not acted in their best interests or

has acted unethically. In addition, because legal expenses insurance providers are

not members of the Law Society of South Africa, policyholders would have little

recourse if the quality of legal services provided by legal expenses insurers was

poor.

The so-called Binder Regulations promulgated under the Short Term Insurance

Act govern the relationship between the insurer and the underwriting

management agent (‘UMA’) who performs one or more of the binder functions on

behalf of an insurer. A drawback of the binder regulations in the case of low

premium products such as legal expenses insurance lies in the difficulty and cost of

distribution. Because UMAs act on behalf of short term insurers, they cannot

act as sales intermediaries. Providers must therefore rely on brokers to sell the

product. However given the low potential commissions or fees generated by the

product, brokers have little incentive to do so.

The binder regulations also appear to have created considerable confusion.

Despite disclosure on policy documents, policyholders are unlikely to be aware that



they are not insured by the UMA with whom they interact but with the insurance

license holder, and would in all likelihood be surprised to find that the insurer can

place the book of business with another UMA, or can bring the binder activities

in-house9.

Given that the focus of this study is on market conduct and the consumer,

prudential regulations were not explored in detail. However providers

highlighted that requirements of the Short Term Insurance Act in this regard are

onerous and arguably overly cautious given the mechanisms that are embedded

into contracts to limit the liability of the insurer. They highlighted that loss ratios

are generally lower, the risk spread is far wider and the individual claim exposure

more limited than is the case with short term insurance generally. Providers also

highlighted that the requirements for registration are onerous, and that the costs

involved in establishing and complying with regulations are high.

During discussions, providers commented that they expect that this is likely to be

exacerbated by Solvency Assessment and Management (SAM) framework.

Regulations are thought to create significant entry barriers leading to the

limited number of specialised legal expenses insurers in the South African market,

and the relatively high proportion of providers who operate as UMAs,

intermediaries or cell captives. It is also a factor leading to the emergence of

unregulated operators.

While regulators acknowledge that governance and risk management requirements

under Pillar 2 of SAM will be more rigorous than the current requirements, they

highlight that the impact of Pillar 1 of SAM may differ. Given that the capital

requirements under SAM will be more risk based, to the extent that Legal Expenses

Insurance is a low risk product, there is a possibility that it may have lighter

capital requirements under SAM.

The FAIS Act has had a significant impact on providers, who have responded to

the legislation in various ways. Some have obtained a temporary exemption

10while other providers have adopted no-advice sales processes. According to

providers, costs to comply with FAIS are high. This has a material impact on the

costs of distribution and by extension, on the premiums associated with the product.

Because FAIS requirements are not aligned with the needs of the product this

additional layer of cost comes with limited commensurate benefit to consumers.

The requirement for representation to be in plain and simple language in line with

the General Code of Conduct is of specific importance in the legal expenses

insurance industry. In addition to poorly understood terminology common to

insurance contracts in general, these policies have the added complexity of legal

terminology. Consumers are therefore at even more risk of not understanding

exactly what they are purchasing and what they are covered for.

Two proposed pieces of legislation may also impact on the legal expenses



insurance industry; the Micro Insurance Act and the Treating Customers Fairly

initiative.

The objectives of the proposed Micro Insurance Act are to extend access and

enhance inclusion, to formalise informal provision, to encourage competition

while protecting consumers through prudential and business conduct regulation

and to improve enforcement and consumer education specifically in the low-

income population.

Current published proposals indicate lower capital adequacy requirements (a

minimum capital adequacy requirement of R3 million with a build up over three

years) as well as greater flexibility with regard to fit and proper requirements

for financial services providers. Assuming proposed benefit caps can be aligned

with the structure of legal expenses insurance contracts, the more flexible

regulations and lower capital requirements may incentivise some providers who

currently operate as UMAs, intermediaries or cell captives to restructure as micro

insurers. It may also encourage entry into the industry of new players, and the

formalisation of membership-based offerings. However the proposed Act will

have no impact on premium products which exceed micro insurance caps.

The TCF initiative outlines a number of customer outcomes that should apply

throughout all stages of interaction with the client. It includes a requirement

that products perform as firms have led customers to expect, and that associated

service is both of an acceptable standard and what they have been led to expect.

Given that legal expenses insurance is a service-intensive offering this

requirement is potentially significant.

However, TCF is principles based rather than rules based and there is significant

scope for interpretation. In addition it is not clear what sanction can be applied

where companies violate these principles. Nevertheless as they stand, some

processes that are common across the industry appear to be at odds with these

principles. For instance during, mystery shopping exercises some providers could

not make available policy documents without first capturing banking details

and getting authorisation to process debit orders. In addition, shoppers were

required to cancel policies in writing despite the fact that policies were purchased

telephonically. Perhaps most importantly, given the inherent conflicts of interest,

some processes adopted by providers in adjudicating whether a case has prospects of

success may be odds with the TCF principles.

2.3 Summary

The review highlighted a number of key areas for further engagement. These

are summarised below from the perspective of four key stakeholders; Clients,

Providers, Regulators and the Legal Profession.

Clients



Clients who participated in focus group discussions feel vulnerable with respect to

the law, and place a high value on the protection that they perceive is offered by

the product. However, the market is characterised by low levels of financial

literacy and low levels of legal literacy. Clients do not read policy documents and

are often unaware of exclusions that apply. This increases the vulnerability of clients

who often do not fully understand the products they have purchased.

In general, clients are unable to assess the quality of legal services that they receive

either from in-house legally qualified staff, or from panel attorneys used by legal

expenses insurers

There is limited knowledge of rights and avenues for recourse within the financial

services realm as well as within the legal profession.

Providers

There is no industry body which represents the interests of legal expenses insurers

and which can make submissions on its behalf to regulators.

Terminology used in policy documentation is complex – sometimes unnecessarily so.

Some current practices are not aligned with TCF. Most importantly, insurers have

clear vested interests when assessing reasonable prospects for success.

There is no industry standard with regard to the definition of claims expenses.

There is no industry standard with regard to the minimum qualifications of

employed legally qualified individuals.

Regulators

The current regulatory environment is not well suited to the specific

characteristics of the product.

The Binder Regulations have made it difficult to distribute the product within the

UMA model and raise questions whether they are appropriate for micro

insurance particularly as brokers play a lesser role in this segment with the focus on

low advice or no-advice sales.

With regard to FAIS, the accreditation process is not aligned with the product. It

thus imposes additional costs on providers without according protection to

policyholders.

Reserving requirements are overly onerous given the nature of the product (e.g. SAM)

providers offering unregulated, member-based products.



The proposed Micro Insurance Act may reduce barriers to entry and reduce

compliance costs for qualifying products. However, it will not address key

regulatory weaknesses that impact on the development of premium products that

could be marketed to higher income segments.

TCF may enhance consumer protection. However, the initiative is principles-based

rather than rules-based and there is scope for interpretation.

Current reporting requirements do not adequately capture true utilisation levels.

In addition data gathered by regulators is not compiled into any useful industry

measures.

Legal profession

The legal expenses insurance industry operates independently of the legal

profession. Legal expenses insurers cannot own a legal firm as is common in

Europe. They may not hire practicing attorneys to represent clients in court

and more junior staff employed by insurers cannot be articled due to the lack

of court exposure. This increases costs and reduces the opportunity to support

the training of new attorneys. In addition, there is no recourse to the profession

for policyholders who receive poor legal services provided by insurers.

Access to legal aid is limited to those with very low incomes. There is a

sizeable market comprising those who earn above the legal aid threshold but

below the level at which they can afford to hire attorneys.

The profession has not engaged with the product and explored its potential to

enhance access to the law for the market as a whole. It has also not assessed the

impact of the product on demand for legal services offered by panel attorneys.

Panel attorneys who provide services for legal expenses insurers service two clients

– insurers and the consumer. There is no recognition by the profession of the

challenges this creates.

How these issues are dealt with is largely a function of the ultimate vision for the

product and the role it could play in enabling access to the law for citizens in

South Africa. It can remain a niche product, attracting a small but not

insignificant number of clients.

Providers can continue to market and service the product despite a number of

onerous regulatory requirements, without formalised engagement with the legal

profession. Alternatively, the product could become the primary mechanism

that enables access to the law for those who are not poor enough to qualify for

Legal Aid, but not rich enough to be able to afford to hire an attorney at standard

market rates. To create this reality, the industry needs to organise itself and

represent its interests to regulators, to engage with the legal profession and to

develop strategies to capacitate clients. It also needs to ensure its products, levels



of disclosure, operating processes and standards of service are of high quality.”

5. CONTINGENCY FEE AGREEMENTS

Under the common law in South Africa, legal practitioners were not allowed to

charge their clients a fee calculated as a percentage of the proceeds the clients

might be awarded in litigation.2 This position was changed by the Contingency

Fees Act 66 of 1997 (“the Act”).3

Section 2 of the Act provides as follows:

“2. Contingency fees agreements

(1) Notwithstanding anything to the contrary in any law or the common law,

a legal practitioner may, if in his or her opinion there are reasonable

prospects that his or her client may be successful in any proceedings,

enter into an agreement with such client in which it is agreed-

(a) that the legal practitioner shall not be entitled to any fees for services

rendered in respect of such proceedings unless such client is

successful in such proceedings to the extent set out in such

agreement;

(b) that the legal practitioner shall be entitled to fees equal to or, subject

to subsection (2), higher than his or her normal fees, set out in such

agreement, for any such services rendered, if such client is successful

in such proceedings to the extent set out in such agreement.

(2) Any fees referred to in subsection (1)(b) which are higher than the

normal fees of the legal practitioner concerned (hereinafter referred to

as the ‘success fee’), shall not exceed such normal fees by more than 100

per cent: Provided that, in the case of claims sounding in money, the

total of any such success fee payable by the client to the legal

practitioner, shall not exceed 25 per cent of the total amount awarded or

any amount obtained by the client in consequence of the proceedings

concerned, which amount shall not, for purposes of calculating such

excess, include any costs.”

The word “proceedings” in the Act means “any proceedings in or before any

2 In Re William Emil Hollard v Paul H Zietsman (1985) 6 NLR 93 at 96-7; Ronald Bobroff & Partners

Inc v De La Guerre; South African Association of Personal Injury Lawyers v Minister of Justice and

Constitutional Development [2014] ZACC 2 at para 2. 3 Which came into operation on 23 April 1999.



court of law or any tribunal or functionary having the powers of a court of law,

or having the power to issue, grant or recommend the issuing of any licence,

permit or other authorisation for the performance of any act or the carrying on

of any business or other activity, and includes any professional services

rendered by the legal practitioner concerned and any arbitration proceedings,

but excludes any criminal proceedings or any proceedings in respect of any

family law matter.”

In terms of section 3(1)(a) of the Act, a contingency fees agreement must be in

writing and in the form prescribed by the Minister of Justice (and Constitutional

Development) after consultation with the advocates’ and attorneys’ professions.

It must then be published in the Government Gazette.4

In PriceWaterHouse Coopers Inc v National Potato Co-operative Ltd5 the

Supreme Court of Appeal stated the following in respect of the Act:

“The Contingency Fees Act 66 of 1997 (which came into operation on 23

April 1999) provides for two forms of contingency fee agreements which

attorneys and advocates may enter into with their clients. The first is a

‘no win, no fees’ agreement (s 2(1)(a)), and the second is an agreement

in terms of which the legal practitioner is entitled to fees higher than the

normal fee if the client is successful (s 2(1)(b)). The second type of

agreement is subject to limitations. Higher fees may not exceed the

normal fees of the legal practitioner by more than 100% and in the case

of a claim sounding in money this fee may not exceed 25% of the total

amount awarded or any amount obtained by the client in consequence of

the proceedings, excluding costs (s 2(2)). The Act has detailed

requirements for the agreement (s 3), the procedure to be followed when

a matter is settled (s 4) and gives the client a right of review (s 5). The

professional controlling bodies may make rules which they deem

necessary to give effect to the Act (s 6), and the Minister of Justice may

make regulations for implementing and monitoring the provisions of the

Act (s 7). The clear intention is that contingency fees be carefully

controlled. The Act was enacted to legitimise contingency fee

agreements between legal practitioners and their clients which would

otherwise be prohibited by the common law. Any contingency fee

agreement between such parties which is not covered by the Act is

therefore illegal.”

The process by which contingency fee agreements operate are best described

4 A contingency fees agreement was published under Government Notice R547 in Government Gazette

20009 of 23 April 1999. 5 2004 (6) SA 66 (SCA) at para 41. See also De La Guerre v Ronald Bobroff & Partners Inc and the

two others, unreported North Gauteng High Court case number 22645/2011, dated 13 February 2013, at

para 11.



having regard to the provisions of the prescribed contingency fees agreement,6 a

copy of which is annexed hereto, marked “C”.

No figures are available in respect of the percentage of civil claims that are

funded by way of contingency fee agreement. From practical experience it is,

however, known that the number of civil claims in personal injury litigation that

is funded by way of such agreement has increased over the last decade. The

exact extent of such increase is not known.

6. THIRD PARTY FUNDING

It has been stated that litigation funding is not difficult to understand:7

“It contemplates financing legal actions with an eye to sharing the spoils on a

successful outcome.”

In PriceWaterHouse Coopers Inc v National Potato Co-operative Ltd8 it was

held that third-party funding is not contrary to public policy. The Supreme Court

of Appeal stated:

“Accordingly it must be held that an agreement in terms of which a stranger to a

lawsuit advances funds to a litigant on condition that his remuneration, in case

the litigant wins the action, is to be part of the proceeds of the suit, is not

contrary to public policy.”

Third party funding of litigation is currently not regulated by any statute or

otherwise and are, theoretically, available for all type of claims.

The process by which such agreements operate is, according to our

understanding, that the plaintiff would sell its right, title and interest in its claim

to the third party for an agreed percentage of the gross proceeds of a successful

claim or settlement of the claim. The parties would normally record that the

plaintiff was selling its claim because it was not able to finance the litigation and

that they regarded the sale as an alternative method of financing the action.

The parties would, further, agree upon and record the contribution each party

6 As published under Government Notice R547 in Government Gazette 20009 of 23 April 1999.

7 Druker “The brave new world of litigation funding” September 2009 De Rebus 25. De Rebus is the

South African attorneys’ journal and is published under auspices of the Law Society of South Africa. It

is accessible at www.derebus.org.za. 8 2004 (6) SA 66 (SCA) at para 46. In Price Waterhouse Coopers Inc v IMF (Australia) Ltd 2013 (6)

SA 217 (GNP) at 220E-G it was held that parties involved in litigation, in which another party is being

funded by an outsider, would be entitled to relief in the form of an order joining the funder to the

litigations, so that a direct order for costs can be obtained against it. Allowing such joinder would have

the beneficial effect of combating possible abuses arising from the recognition of the validity of

champertous contracts.



has to make, whether in kind or in money, that the claim is purchased on the

strength of research done by the third party funder in connection with the claim,

that the latter would appoint the professional team to conduct the litigation and

prosecute the claim at its own risk, and that the plaintiff would co-operate fully

for purposes of the action.9

According to Berger,10

the last few years have indeed seen an increase in

litigation funding activity in South Africa, as foreign investors, already a long-

standing feature of the dispute resolution landscape in the UK, USA, Australia

and elsewhere; seek out returns that cannot be matched by conventional markets.

In addition, according to Berger, home-grown funding initiatives are starting to

occur, with South Africa’s first dedicated funding company reportedly having

commenced business in 2013.11

Unfortunately, no figures are available.

7. MEDIATION

On 1 August 2013 rules and forms of mediation will come into operation in the

magistrates’ courts.12 It is anticipated that the public, especially the poor and those in

need of access to justice, will not easily and overwhelmingly make use of the process of

mediation which will pertain to all types of claims and can be invoked only by consent

of all the parties. A process of educating such litigants will be needed in order to

ensure that they understand and are amenable to mediation. This, in itself, will be an

expensive and time-consuming exercise which, given the annual budget of the relevant state departments, seems highly improbable.

13

9 In some instances a company is used as a vehicle to purchase the claim and provide the agreed funding.

Normally, in such instance, the plaintiff is entitled to take up shares in the company and to appoint an

agreed numbr of directors. 10

“Let the litigation funder beware” Werksmans Legal Briefs (accessible at www.werksmans.com/legal-

briefs-view/let-litigation-funder-beware/). 11

This is, apparently, the South African Legal Funding Company Ltd (“SALFCO”) which, according to

its website (www.salfco.com/p/613902/what-is-litigation-funding) concentrates on specialised debt

recoveries and the funding of legal claims in the following categories: Damages claims; Arbitration;

Insolvency claims; Medical malpractice. SALFCO’s stated goal is to become the leading (a the first)

South African litigation company. It will, allegedly, invest mainly into legal claims of R50 million and

more in value and, to this end, intends to raise capital from various local and international private

investors, investor groups, companies and different registered financial funds by offering these parties

opportunities to supply the required litigation funding for approved claims in return for a shareholding in

the various SALFCO companies. It also intends to offer larger, selected pre-evaluated claims, to

international litigation funding groups/companies for a pre-determined fee or commission or on a joint

venture basis. 12

In terms of section 166 of the Constitution, the courts in South Africa consist of: The Constitutional

Court; The Supreme Court of Appeal; The High Court; The Magistrates’ Courts. 13

On 23 August 2014 a workshop on mediation in medical law disputes will be held at the College of

Law, University of South Africa, Pretoria. According to the invitation “[m]edical disputes are heading



8. CONCLUSION

In a country with the worst Gini coefficient in the world, the woeful situation of

state funded legal aid and its alternatives in civil cases is denying a large number of

persons their constitutional right to have any dispute that can be resolved by the

application of law decided in a fair public hearing before a court. Undoubtedly, the

state is not leading by example, as it constitutionally should, and it is not expected that

the persons in need of legal aid will, in the foreseeable future, each have their day in

court on an equal basis with those who can fund litigation themselves.

ANNEXURE “A”

4.9 Civil cases

When Legal Aid SA has sufficient resources, legal aid is available for the categories of

cases described in 4.1.1 of this Guide where substantial injustice would otherwise

result.

Æ See 4.1.1 on page 36.

These criteria decide if a person has a right to legal aid in civil cases at State

expense:

(a) The seriousness of the issue for the person, for example, if the person’s

constitutional rights or personal rights are at risk.

(b) The complexity of the relevant law and procedure.

(c) The ability of the person to represent himself or herself effectively without a

lawyer.

(d) The financial situation of the person.

(e) The person’s chances of success in the case.

(f) Whether the applicant has a substantial disadvantage compared with the other

party in the case.

Where these criteria are met, the applicant should get legal aid as long as Legal Aid SA

has the necessary resources and the other requirements of this Guide are met.

in the direction of mediation especially with the draft mediation rules for Magistrate’s [sic] Courts having

recently been published.” The purpose of the workshop is to discuss “the way forward in South Africa”.



4.9.1 EXCLUSION OF LEGAL AID IN CERTAIN CIVIL CASES

Legal aid may not be granted for cases listed in (a) – (q) below, but a decision not to

grant legal aid in these kinds of cases must be consistent with Legal Aid SA’s

obligations under section 7 of the Constitution, read with relevant legislation giving

content to these constitutional rights:

(a) Financial enquiries under section 65 and Administration

Orders under section 74 of Magistrates’ Courts Act Legal aid is not available to

judgement debtors for these proceedings under sections 65 and 74 of the Magistrates’

Courts Act 32 of 1944.

Administration of estates and insolvency cases

Legal aid is not available for:

•The administration, voluntary surrender or sequestration of an estate, or

•The liquidation of a legal person, or

•Assisting with an application for the rehabilitation of an unrehabilitated insolvent.

But legal aid may be granted for the administration of an estate to protect the best

interests of children under section 28(1)(h) of the Constitution if the child qualifies for

legal aid under 4.18 of this Guide.

C Certain personal damages cases

Legal aid is not available for an action claiming damages on the grounds of defamation,

breach of an engagement contract, infringement of dignity, infringement of privacy,

seduction, adultery or inducing someone to desert or stay away from his/her spouse. But

legal aid may be granted to defend these kinds of actions.

The limitations on legal aid do not apply to:

•Litigation in the Equality Courts, or

•Legal aid under Legal Aid SA’s Impact Services Policy.

108.

(d) Small Claims Court cases

Legal aid is not available for any action that an applicant could bring in a Small Claims



Court.

In addition, legal aid is not available for the prosecution of a claim that does not exceed

the quantitative jurisdiction of the Small Claims Court by

more than 50%. The reason is that the likely costs of the case rarely justify legal action,

and it can easily be brought within the jurisdiction of the Small Claims Court by

abandoning (giving up) part of the claim.

Insufficient prospects of success, enforcement and costs recovery on balance of

probabilities

Legal aid is not available for any civil matter where the JCE has not been

satisfied on a balance of probabilities that there are prospects of success, enforcement

and, where applicable, recovery of costs.

This limitation will not apply to Impact Services matters or matters under section 38 of

the Constitution.

(f) No substantial and identifiable material benefit

Legal aid is not available for cases where, in the opinion of the JCE, there is no

substantial and identifiable material benefit to the client. While starting and defending

actions in burial disputes is excluded, legal aid is available when burial disputes may be

resolved through alternative dispute resolution.

This limitation will not apply to litigation in an Equality Court and Impact Services

matters.

(g) Civil appeals

Legal aid is not available in civil appeals without the CLE’s consent.

The CLE must be satisfied that:

•On a balance of probabilities, there is a chance that the appeal will succeed, and

•The costs of the appeal will justify the benefit to the legal aid applicant.

(h) Legal Aid SA exclusions

Legal aid is not available in cases excluded by the Board from time to time.

(i) Costs outweigh benefits



Legal aid is not available for any case in which, in the opinion of the JCE, the benefit or

the potential benefit to the client does not justify the anticipated costs of the case.

This exclusion does not apply to Equality Court cases or to Impact Services matters.

(j) Prescription of claim

Legal aid is not available for a claim that has prescribed or is unlikely to be acted on

within the time left before prescription and where condonation is

unlikely to be obtained.

(k) Conveyancing and notarial matters

Legal aid is not available for any notarial or conveyancing matters. In these cases,

clients should be referred to the relevant Law Society for pro bono (free) assistance.

(l) Matters not involving litigation

Legal aid is available for any non-litigious matter, including any arbitration or

mediation.

This applies to:

•Judicare practitioners.

•Justice Centres or Co-operation Partners.

•Labour tenant, Extension of Security of Tenure Act (ESTA) or Prevention of

Illegal Occupation and Eviction from Land Act (PIE) matters.

•Proceedings to enforce Commission for Conciliation, Mediation and Arbitration

(CCMA) awards.

•Litigation in the Labour Courts and Labour Appeal Courts.

Æ For more about non-litigious legal services through Justice Centres, see 4.12 on

page 58.

Æ For more detail on labour tenant, ESTA and PIE cases, see 4.14 on page 59.

Æ For more information on other labour cases, see 4.10 on page 55.

(m) Applicant entitled to other State funded legal representation

Legal aid is not available for a civil matter where the legal aid applicant is entitled to

legal representation at the expense of the State Attorney or a government department.

(n) Road Accident Fund and personal injury claims



Legal aid is not available for bringing claims against the Road Accident

Fund or any kind of personal injury claims except in the case of minors. Legal aid can

be made available when a minor child is the claimant, assisted by their guardian. These

kinds of cases should be done on a contingency fee basis by private practitioners.

(o) Unrealistic expectations

Legal aid is not available in all civil cases where a client has unrealistic expectations of

what can be achieved or awarded through winning the case.

(p) Administrative tribunals

Legal Aid is not available for hearings before administrative tribunals eg:

In appropriate cases, legal aid may be granted to review decisions of administrative

tribunals.

(q) Restrictions on number of civil matters

Legal aid applicants are restricted to one civil matter on legal aid at a time unless

additional matters are approved by the ROE. The ROE must be satisfied that:

•on a balance of probabilities, there is a chance that the case will succeed, and

•the costs of the case will justify the benefit to the legal aid applicant.

4.9.2 MAINTENANCE AND DOMESTIC VIOLENCE CASES

In maintenance and domestic violence cases, Legal Aid SA may provide indigent

legal aid applicants with:

(a) An initial consultation

An initial consultation to advise a possible litigant on his/her rights, the procedure to be

followed and the chances of success.

(b) Legal representation under conditions

Legal representation in any court hearing, but only if:

•The legal aid recipient’s claims or defences have a chance of success on balance of

probabilities, and

Legal representation in maintenance matters may also be provided where:

•that there has been a failure by the system to enable the applicant to seek or

execute the order for a period longer than 12 months, or



•that there is abuse of the system by the other party which makes it difficult for the

granting or execution of the order for a period longer than 12 months.

4.9.3 APPOINTMENT OF A CURATOR AD LITEM OR A CURATOR BONIS

(a) Decision by ROE

When legal aid is required for the appointment of a curator ad litem or a curator bonis,

the case must first be referred to the ROE for a decision.

If the proposed curator is not an Legal Aid SA employee, steps (b) and (c) below

must be followed.

(b) Completion and signing of forms

When a curator ad litem or a curator bonis is appointed, the attorney must complete

Annexure N and the proposed curator must sign the completed form and return it to

Legal Aid SA.

(c) Appointment without meeting requirements

If an attorney appoints a curator ad litem or a curator bonis without meeting these

requirements, Legal Aid SA reserves the right not to pay the curator.

4.10 Labour cases

4.10.1 LEGAL AID ASSISTANCE

Legal Aid SA may grant legal aid for:

•Legal representation in Labour and Labour Appeal Courts.

Assistance to farm workers in finalising their rights under the Labour Relations Act 66

of 1995, as required under section 8(3) of the Extension of Security of

Tenure Act 62 of 1997 (ESTA).

•Assistance to Legal Aid SA clients to enforce Commission for Conciliation,

Mediation and Arbitration (CCMA) awards except where there is no prospect of

recovery

4.9.1(e) on page 52.

Section 149(1)(b) of the Labour Relations Act allows the CCMA, in co-ordination with

Legal Aid SA, to further provide for legal assistance

and advice in non-litigious forms of dispute resolution. When arrange-ments are made



to implement this provision, stakeholders will be advised by an Legal Aid SA Circular.

4.10.2 NO LEGAL AID ASSISTANCE

Legal Aid SA does not provide legal representation for conciliation and arbitration

proceedings at the CCMA or Bargaining Councils.

Æ For more information on non-litigious matters, see 4.9.1(l) on page 53 and non-

litigious services, see 4.12 on page 58.

4.11 Divorce and family law cases

4.11.1 USE OF THE REGIONAL CIVIL COURT

If legal aid is granted for bringing a regional civil action, the action must be

started in the Regional Civil Court, unless the JCE grants approval for instituting action

in another court.

4.11.2 DIVORCES IN THE HIGH COURT

The JCE must consider these factors when exercising discretion to grant legal aid

for instituting a divorce action in the High Court:

•Cost effectiveness

•Logistical factors like the distance to the court

4.11.3 LIMITS ON DIVORCE ASSISTANCE

Legal aid will not be granted:

•For a divorce appeal case.

•In a divorce if the JCE is satisfied that there are, on a balance of probabilities, no

prospects of success for the legal aid client to get what he/she is asking for.

•Where it is established that the client married a foreigner for payment so that the

foreigner can get South African citizenship.

4.11.4 CARE OF OR CONTACT WITH CHILDREN

Legal aid may only be granted to vary or enforce a divorce order when:

•The issue in dispute deals with the care of children or contact with children, and

•The application is supported by a report of a social worker or the Family Advocate.

The Family Advocate does not prepare a report unless proceedings have been instituted.

Proceedings may initially be started to get the Family Advocate’s Report, but they

should be held over:

•While waiting for the report of the Family Advocate, and



•Until the JCE has considered the legal practitioner’s merit report after receipt of

the Family Advocate’s report.

The JCE may still grant legal aid if convinced that the Family Advocate’s report may be

incorrect. The JCE may obtain further reports from relevant experts to decide the

prospects of success, on a balance of probabilities, of continuing litigation in spite of an

unfavourable Family Advocate’s report.

The JCE may authorise the continuation of legal aid, if after receipt of further reports,

the JCE is satisfied, on a balance of probabilities, that there are prospects of success.

4.11.5 CONTRIBUTIONS TO COSTS

Applying for a contribution to costs

If a JCE has reliable information that the other party in a divorce action has the

financial ability to make a contribution towards costs or to pay the costs, the JCE must

direct that an application for a contribution towards costs be made at the first available

opportunity after issuing the divorce summons. It is not necessary to bring this

application if the costs of the application will be more than the amount of the

contribution.

(b) Extending the original legal aid instruction

If the outcome of the application in (a) has not been sufficiently successful, the JCE

may extend the original instruction to continue divorce proceedings.

4.12 Non-litigious legal services

4.12.1 NON-LITIGIOUS ASSISTANCE THROUGH JUSTICE

CENTRES

(a) When non-litigious legal aid is allowed

Legal aid may only be given for non-litigious legal services, including arbitration

and mediation, if the main service provider is:

•A salaried legal practitioner employed by a Justice Centre or Co-operation

Partner.

•A person working under the control and supervision of a salaried legal practitioner

employed by a Justice Centre or Co-operation Partner.

•An accredited Judicare practitioner who is instructed to provide mediation services

on behalf of Legal Aid SA clients.

(b) Legal aid for specialist or expert advice



However, in appropriate circumstances, the JCE can get advice or an opinion from a

specialist or expert if necessary to properly advise a client.

4.13 Land restitution cases

The Restitution of Land Rights Act 22 of 1994 provides for the restitution of registered

or unregistered rights in land by people or communities who were dispossessed on or

after 19 June 1913 under racially-based discriminatory laws.

4.13.1 CASES BEFORE 1 APRIL 1998

Legal Aid SA acted as the agent of the Commission for the Restitution of Land Rights

(CRLR) in providing legal representation under section 29(2) of the Restitution of Land

Rights Act.

Where legal aid was granted before 1 April 1998, Legal Aid SA should be reimbursed

by the CRLR for any fees and disbursements incurred, irrespective of the date on which

these were actually incurred.

4.13.2 CASES AFTER 1 APRIL 1998

Limited legal aid continues to be possible for cases under the Resti-tution of Land

Rights Act.

4.13.3 TYPES OF CASES

Guidelines for land rights legal aid:

•In general, legal aid is excluded for claims under the Restitution of Land Rights

Act. But legal aid is possible for proceedings before the Land Claims Court and

matters reasonably linked to these proceedings when:

o The Land Claims Commissioner makes funds available to Legal Aid SA to

fund these matters, or

o The Land Claims Commission is the opposing party to the litigation or

possible litigation.

•Legal aid is not available for the claim lodgement and investigation.

4.14 Labour tenant, ESTA and PIE cases

Legal Aid may be available for persons affected by the Land Reform (Labour Tenants)

Act 3 of 1996, the Extension of Security of Tenure Act 62 of 1997 (ESTA) and the

Prevention of Illegal Occupation and Eviction from Land Act 19 of 1998 (PIE). Legal

aid for these kinds of cases depends on specific funding being made available to Legal

Aid SA by government.



Section 1 of the Land Reform (Labour Tenants) Act defines a labour tenant:

‘‘Labour tenant means a person –

(a) Who is residing or has the right to reside on a farm;

(b) Who has or has had the right to use cropping or grazing land on the farm

referred to in paragraph (a) or another farm of the owner, and in consideration

of such right provides or has provided labour to the owner or lessee; and

(c) Whose parent or grandparent resided or resides on the farm and had the use of

cropping or grazing land on such farm or another farm of the owner, and in

consideration of such right provided or provides labour to the owner or lessee

of such or such other farm, including a person who has been appointed a

successor to a labour tenant in accordance with the provisions of Section 3(4)

and (5) but excluding a farm worker.’’

JCEs should treat cases involving labour tenants and farm labourers as a civil matter.

Therefore, if the legal aid applicant qualifies for legal aid, a legal aid instruction must be

issued for a merit report before proceeding with the case. In 4.14.1 to 4.14.7, we

examine guidelines for handling labour tenant, ESTA and PIE matters.

4.14.1 LEGAL AID WHEN FACED WITH EVICTION

While legal aid is not normally granted to a defendant or respondent before the

institution of action, legal aid may be granted to labour tenants, or ESTA or PIE

occupiers, if they satisfy the JCE that they or family members are threatened with

eviction. This may, as a result, require legal representation to finalise their rights

under the Labour Relations Act 66 of 1995, as set out in section 8(3) of ESTA.

4.14.2 DISCRETION TO APPOINT OUTSIDE ATTORNEY

With labour tenants and farm labourers, the JCE has a discretion to appoint an

accredited attorney who practices outside the magisterial district, but in the

province within which the dispute arises.

4.14.3 LABOUR TENANT OR FARM LABOURER?

Where it is unclear whether the legal aid applicant is a labour tenant or a farm labourer,

legal aid may be granted in the alternative.

3 For example: in terms of the provisions of the Land Reform (Labour Tenants) Act,

1996 alternatively the provisions of the Extension of Security of Tenure Act, 1997.

When legal aid is granted under this Chapter of the Guide, the legal aid instruction

must clearly refer to either the Land Reform (Labour Tenants) Act of 1996 or the

Extension of Security of Tenure Act of 1997.

4.14.4 EXTENDING A LEGAL PRACTITIONER’S MANDATE



The JCE has the discretion, after receiving well-motivated written representations, to

extend the mandate of any legal practitioner to act in any labour tenant, ESTA or PIE

matter to include legal proceedings in the High Court or the Land Claims Court.

4.14.5 APPLYING FOR RESCISSION OF JUDGEMENT

Where a JCE realises that judgement has already been granted against

any labour tenant, or ESTA or PIE occupier, an instruction must initially be issued for

the launching of an application for rescission of judgement.

3 For example: in terms of the Land Reform (Labour Tenants) Act, 1996 and/or the

Extension of Security of Tenure Act, 1997 and/or the Prevention of Illegal

Occupation and Eviction from Land Act 19, 1998.

4.14.6 DISCRETION TO AUTHORISE ALTERNATIVE DISPUTE

RESOLUTION

In labour tenant, ESTA and PIE matters where litigation has already started, the

JCE has discretion to authorise mediation, arbitration or other alternative dispute

resolution on a legal aid basis, including Judicare, if satisfied by written

representations from the legal practitioner that these methods are likely to:

•Eliminate or shorten litigation.

•Reduce the fees and disbursements that would otherwise be payable by Legal Aid

SA.

Where mediation is authorised by the JCE, the attorney instructed on a legal aid basis

may receive payment for fees and disbursements at the civil tariff rates in Annexure F.

The Department of Land Affairs or the relevant local authority must be approached to

arrange for the services of a mediator at the expense of the Department or local

authority.

4.14.7 INTERIM FEES

The JCE may authorise the payment of interim fees in any labour tenant, ESTA or PIE

matter in which a legal practitioner makes written representation to the JCE.

4.15 Asylum seekers

Legal aid is available to Asylum seekers applying or intending to apply for Asylum

under Chapters 3 and 4 of the Refugees Act 130 of 1998.



4.15.1 NO RESIDENCE REQUIREMENT FOR ASYLUM SEEKERS

This Guide’s policies and procedures for granting legal aid in civil cases apply to

asylum cases, except that:

•It is not necessary for an Asylum seeker applying for legal aid for an Asylum case

to be physically resident in South Africa.

•It is sufficient if, at the date of the application for legal aid, an Asylum seeker is

physically present in South Africa.

4.15.2 APPLYING ANYWHERE IN SOUTH AFRICA

An Asylum seeker, who applies for legal aid for an application for asylum under

Section 21 of the Refugees Act, may apply anywhere in South Africa.

4.15.3 SECTIONS 24, 25 AND 26 OF REFUGEES ACT

Examples of proceedings:

•Section 24 (decision by a Refugee Status Determination Officer).

•Section 25 (review by the Standing Committee).

•Section 26 (appeals to the Appeal Board).

An Asylum seeker, who applies for legal aid for legal representation in proceedings

under these sections of the Refugees Act, may apply anywhere in South Africa, but the

services will be co-ordinated by the Justice Centres in Pretoria, Johannesburg, Cape

Town, Port Elizabeth or Durban.

The Justice Centre where the application was made, must refer these matters to the

closest of the Justice Centres listed above, as the Tribunals for hearing Section 24,

25 or 26 proceedings only sit in the 5 cities mentioned.

4.15.4 LEGAL PRACTITIONER’S MANDATE FOR APPLICATION ONLY

When legal aid is granted for an application for Asylum under section 21 of the

Refugees Act, the legal practitioner’s mandate ends after the application is lodged, and

the legal practitioner reports and accounts to the JCE. The mandate may be extended by

the JCE if it is necessary to deal with issues and queries arising out of the application.

4.15.5 PRIORITISING INSTRUCTIONS IN ASYLUM CASES

The JCEs in Pretoria, Johannesburg, Cape Town, Port Elizabeth and Durban must,

when distributing legal aid instructions for proceedings under sections 24, 25 and

26 of the Refugees Act, give preference:

•Firstly, to Co-operation Partners who specialise in refugee work.

•Secondly, to Justice Centres.

•Thirdly, to private legal practitioners, using Legal Aid SA’s



Accreditation System.

Æ For information on the Accreditation System, see Annexure O1 on page 319.

4.16 Hague Convention cases

Depending on the availability of resources, legal aid is available for Hague Convention

cases. These are cases when the Central Authority in South Africa complies with its

duties under articles 7g and 26 of the

Schedule to the Hague Convention on the Civil Aspects of International Child

Abduction Act 72 of 1996 – the Hague Convention. This must be read with sections

274 to 280 of the Children’s Act 38 of 2005 dealing with Hague Convention matters.

The ‘Central Authority’ refers to the State, represented in practice by the Family

Advocate.

4.16.1 SPECIAL RULES FOR HAGUE CONVENTION CASES

This Guide’s policies and procedures for granting legal aid in civil cases apply to

Hague Convention cases, except that:

•It is not necessary for the applicant to be physically resident in South Africa.

•It will seldom, if ever, be possible for the legal aid applicant to appear in person

before the JCE to complete the means test and legal aid application.

•If the legal aid applicant does not qualify under the means test, the National

Operations Executive (NOE) must be notified so that he/she may advise the

Central Authority.

TARIFF FOR HAGUE CONVENTION CASES

The fees and disbursements allowable in Hague Convention cases done on a Judicare

basis fall under Legal Aid SA’s tariff for civil matters.

4.17 Equality Court cases

Legal aid is available for matters governed by the Promotion of Equality and Prevention

of Unfair Discrimination Act 4 of 2000. But personal damages claims that are excluded

under this Guide may not be dealt with as part of an equality court action or claim.

The fees and disbursements allowed in Equality Court cases done on a Judicare basis

are set out in Legal Aid SA tariffs for civil matters.



4.18 Children’s civil cases

Section 28(1)(h) of our Constitution sets out the circumstances when the State must

provide legal representation to children in civil matters.

The State makes legal representation available through Legal Aid South Africa. Legal

aid is available under the Legal Aid Act, provisions of the Constitution and other

relevant legislation such as the Children’s Act 38 of 2005.

Legal Aid SA normally applies a means test and the provisions of the Constitution in

making civil legal aid available. The means test determines if a person is indigent

according to the Legal Aid Act.

Legal aid is not available to persons who can afford their own legal representation. The

affordability of legal representation depends on the

person’s means and the costs of the legal representation.

4.18.1 SUBSTANTIAL INJUSTICE

The Constitution provides that legal representation must be granted at State expense in

civil proceedings affecting a child if substantial injustice would otherwise result

(section 28(1)(h)).

These criteria decide if a child has a right to legal aid in civil cases at State expense:

•The seriousness of the issue for the child, for example, if the child’s constitutional

rights or personal rights are at risk.

•The complexity of the relevant law and procedure.

•The ability of the child to represent himself or herself effectively without a lawyer.

•The financial situation of the child or the child’s parents or guardians.

•The child’s chances of success in the case.

•Whether the child has a substantial disadvantage compared with the other party in

the case.

Where these criteria are met, the child should get legal aid as long as Legal Aid SA has

the necessary resources and the other requirements of this Guide are met.

4.18.2 LEGAL AID APPLICATION

An application for legal aid by a child is similar to other legal aid applications,



except that:

•A child or any adult acting on behalf of the child may apply for legal aid.

•If there is a court order requiring legal aid to be provided, then the application for

legal aid (LA1) does not have to be signed.

•If there is no court order, then the person acting on behalf of the child may sign the

application for legal aid on behalf of the child.

If the child is not assisted by an adult, then the JCE should assist in obtaining the

necessary information to complete the application for legal aid on behalf of the child.

The JCE must then sign the application certifying that he/she completed the application

for legal aid on behalf of the child.

4.18.3 MEANS TEST

The means test is similar in an application for legal aid by a child, except that:

•Where the child is not assisted by his/her parents or guardians, then the child’s

means will be considered.

•Where the child is assisted by his/her parents or guardians, then their means will be

considered.

•If the child is assisted by his/her parents or guardians, who exceed the means test

and can afford to provide legal representation for the child, yet fail, refuse and or

neglect to do this, then legal aid will be provided to the child if substantial

injustice would otherwise result.

If this happens, Legal Aid SA may institute proceedings against the parents or

guardians to recover these costs if:

o The parents or guardians could afford to provide legal representation for the

child as a part of their duty of support, and

o They neglected, failed or refused to provide legal representation for the child.

4.18.4 INSUFFICIENT PROSPECTS OF SUCCESS, ENFORCEMENT AND

COSTS RECOVERY ON BALANCE OF PROBABILITIES

Æ Where a child is the respondent or defendant in a civil matter, the merits of the civil

matter are irrelevant and a child will be entitled to legal aid irrespective of the

merits.

Æ If a child wishes to bring civil proceedings, then the merits will be relevant.

4.18.5 THE CHILDREN’S ACT: LEGAL REPRESENTATION OF

CHILDREN

If substantial injustice would otherwise result, sections 29(6)(a) and (b) of the

Children’s Act direct a court to appoint a legal practitioner to represent the child at the

court proceedings and order the parties to the proceedings, or any one of them, or the



State, to pay the costs of the representation.

Sections 55(1) and (2) of the Children’s Act say that, where a child involved in a matter

before the Children’s Court is not represented by a legal representative, and the court is

of the opinion that it would be in the best interests of the child to have legal

representation, the court must refer the matter to Legal Aid SA to prepare a section 3B

report.

Legal Aid SA must:

•Deal with the matter according to section 3B of the Legal Aid Act, adapted to the

context of the child.

•Evaluate the matter and submit a report back to the court under section 3B(2).

Once the court has received the written report from Legal Aid SA, then the Court may

order the Board to provide legal representation at State expense.

The effect of section 55 is to limit the right to legal representation at State expense

for matters relating to the Children’s Act to when the court orders Legal Aid SA to

provide legal representation for children.

4.18.6 TYPES OF CHILDREN’S ACT MATTERS WHERE LEGAL

REPRESENTATION CAN BE ORDERED

(a) Parental responsibilities and rights agreements

Before registering a parental responsibilities and rights agreement, or making a parental

responsibilities and rights agreement an order of court, the Family Advocate or the

court must be satisfied that the parental responsibilities and rights agreement is in the

best interests of the child.

(b) Assignment of contact and care to interested person by order of court

Any person having an interest in the care, well-being or development of a child may

apply to the High Court, a divorce court in divorce matters or the Children’s Court for

an order granting the applicant contact with the child or care of the child, with some

conditions if necessary.

(c) Assignment of guardianship by order of court

Any person having an interest in the care, well-being and development of a child may

apply to the High Court for an order granting guardianship of the child to the applicant.



(d) Person claiming paternity

A person who is not married to the mother of a child, and who is or claims to be the

biological father of the child, may apply for an amendment to the registration of birth of

the child identifying him as the father of the child, if the mother consents to this

amendment.

Where the mother refuses to consent, is incompetent to give consent, cannot be located

or is deceased, then a person may apply to a court for an order confirming his paternity

of the child.

Æ See section 26(1)(b) of the Children’s Act and section 11(4) of the Births and

Deaths Registration Act 51 of 1992.

(e) Termination, extension, suspension or restriction of parental responsibilities

and rights

A person may apply to the High Court, a divorce court in a divorce matter or a

children’s court for an order suspending for a period, terminating, extending or limiting

any or all of the parental responsibilities and rights which a specific person has in

relation to a child.

This application may be combined with an application for the assignment of contact and

care over the child to the applicant.

Æ See sections 23 and 28 of the Children’s Act.

(f) Child in need of care and protection

A children’s court must decide the question of whether a child is a child in need of care.

The Children’s Act says that a child is in need of care and protection if, the child:

•Has been abandoned or orphaned and is without any visible means of support.

In addition, a child who is a victim of child labour or a child in a child-headed

household may also be a child in need of care and protection.

Children’s Act.

(g) Adoption

A child is adopted if the child has been placed in the permanent care of a person under a



court order following section 242 of the Children’s Act.

In considering an application for the adoption of a child, a court must take all relevant

factors into account, as listed in section 240 of the Children’s Act. This includes

whether the adoption is in the best interests of the child.

The Children’s Court may make an order for an adoption between countries (inter-

country adoption) if all requirements have been complied with, including section 231 on

persons who may adopt a child.

(h) Child abduction provisions of the Hague Convention

The Hague Convention on International Child Abduction is in force in South Africa,

with its provisions subject to our Children’s Act.

The Children’s Act directs that a legal representative must represent the child in all

applications under the Hague Convention if the requirements of Section 55 are met.

Æ For more on Hague Convention cases, see 4.16 on page 63.

Legal Aid SA policies and procedures for granting legal aid in civil cases apply to

Hague Convention cases, except that:

•It will seldom, if ever, be possible for the legal aid applicant/child to complete the

means test and legal aid application.

•If the legal aid applicant does not qualify under the means test, the NOE must be

notified so that he/she may advise the Central

Authority.

•The ROE must select the legal practitioner for the child (in other words, not

following Legal Aid SA’s Accreditation System).

•The person receiving the legal aid application must consult the ROE before

authorising any instruction for a Hague Convention

case.

•The ROE may consult with the Central Authority in selecting a competent legal

practitioner to instruct for the child.

Æ See sections 270 to 280 of the Children’s Act.

The fees and disbursements allowed in Hague Convention cases done on a Judicare

basis fall under Legal Aid SA’s tariff for civil matters.



4.18.7 OTHER LEGISLATION REQUIRING LEGAL

REPRESENTATION FOR CHILDREN

(a) Intervention in divorce, maintenance or custody proceedings

The ROE must give prior written consent for a child to get legal representation to

intervene in divorce, care or maintenance proceedings between the parents of the child

if:

the Maintenance Act 99 of 1998.

(b) Administration of estates

Legal aid may be granted for the administration of an estate where it is required to

protect the best interests of a child and if the child qualifies for legal aid according to

4.18.2 on page 66.

Legal aid in these matters is restricted to estate matters where the value of the estate

does not exceed the amount determined by the Minister in terms of section 18(3) of the

Administration of Estates Act of 1965, save where there is an immovable property that

exceeds the said amount but is valued at less than R500,000.

(c) Road accident fund and personal injury claims

If substantial injustice would otherwise result, legal aid is available for bringing claims

against the Road Accident Fund and for bringing personal injury claims where a minor

child is the claimant, assisted by his/her guardian.

(d) Domestic Violence Act

Legal aid may be granted to a child in a domestic violence matter where it is required to

protect the best interests of a child and if substantial injustice would otherwise result.

(e) Refugees Act

Legal aid may be granted to an unaccompanied foreign minor under the Refugees Act

where it is required to protect the best interests of a child and if substantial injustice

would otherwise result.



4.18.8 OTHER MATTERS REQUIRING LEGAL REPRESENTATION FOR

CHILDREN

(a) Money claims

Legal aid may be granted to a child for a money claim that exceeds the Small Claims

Court jurisdiction by more than 50% where it is required to protect the best interests of

a child and if substantial injustice would otherwise result.

(b) Curator ad litem and curator bonis applications

When legal aid is required for the appointment of a curator ad litem or a curator bonis,

the case must first be referred to the ROE for a decision.

these steps

must be followed:

•When a curator ad litem or a curator bonis is appointed, the attorney must

complete Annexure N and the proposed curator must sign the completed form and

return it to Legal Aid SA.

•If an attorney appoints a curator ad litem or a curator bonis without meeting these

requirements, Legal Aid SA reserves the right not to pay the curator.

4.19 Mental Health Care Act users

Legal aid is available to health care users, where substantial injustice would otherwise

result, in accordance with section 15 of the Mental Health Care Act 17 of 2002.

The Legal Aid Guide’s provisions on the means test are relevant to an application

for legal aid by a mental health care user, except that:

•Where the mental health care user is not assisted, then the means of the mental

health care user will be considered.

•Where the mental health care user is assisted by his/her parents, guardian, spouse,

life partner or child, then his/her means will be considered.

•If the mental health care user is assisted by his/her parents, guardian, spouse, life

partner or child, who exceed the means test and can afford to provide legal

representation for the mental healthcare user, yet fail, refuse and or neglect to do

this, then legal aid will be provided to the mental health care user if substantial

injustice would otherwise result.



If this happens, Legal Aid SA may institute proceedings against the parents, guardian,

spouse, life partner or child to recover these costs if:

•The parents, guardian, spouse, life partner or child could afford to provide legal

representation for the mental health care user as a part of their duty of support,

and

•They neglected, failed or refused to provide legal representation for the mental

health care user.

4.20 Commissions of Inquiries

Where funds are made available by the establishing authority of the commission, legal

aid should be provided for the purpose of legal representation at commissions for

persons appearing before a commis-sion of inquiry where the commission has certified

that they have standing before the commission. Where such funding is not made

available, then legal aid will only be made available in exceptional circumstances such

as where a person has a substantial and material interest in the outcome of the

commission and which could materially influence the outcome of any potential civil

claim, provided that:

(a) such person/s are indigent and qualify in terms of the means test;

(b) such person/s has/have been certified by the Commissioner that they have a

proper standing before the commission;

(c) the prospect of hardship to the person/s if assistance is declined;

(d) the nature and significance of the evidence that the person/s is/are giving or

appears likely to give;

(e) the extent to which representation is required to enable the inquiry to fulfil its

purpose;

(f) whether the interests of a person will be advanced by any other

person/association certified to appear before the commission;

(g) any other matter relating to the public interest.

Subject to Legal Aid South Africa being able to allocate the necessary

resources/funding.

Subject further that funding shall be provided subject to compliance with unsolicited

proposals dealt with under National Treasury Practice Note 11 of 2008/ 2009, where

such persons seek to use/appoint practitioners of their own choice.

Judicare tariffs as set out in Annexure F will apply where a legal practitioner in private



practice is instructed.

ANNEXURE “B”

Chapter 5:

Qualifying for Legal Aid

5.1 Indigence and the means test

The Act does not define ‘indigent person’. Therefore, Legal Aid SA has laid down a

means test that is revised from time to time. The means test determines indigence for

the purpose of considering legal aid.

With effect from 1 July 2004, simplified means test forms have been used in all cases

that cannot be disposed of on the LA1 form.

Æ Compare the LA1 form in Annexure C on page 269 with the amplified form in

Annexure G1 & G2 on page 298.

5.1.1 MEANS TEST ENQUIRY - 3 STEPS

These guidelines set out 2 steps for determining qualification for legal aid through

the means test in criminal or civil matters. In criminal cases where the means test is

exceeded by the applicant, then legal aid should be refused and the legal aid

applicant should be advised of the right to appeal in accordance with Annexure L.

A legal aid applicant must qualify both in respect of gross monthly income and net

assets to pass the means test.

Æ See Annexure L on page 315.

First:

•The legal aid applicant completes, or is assisted in completing, the legal aid

application.

Second:

•The person receiving the legal aid application determines whether the legal aid

applicant is single or a member of a household or a

child.

Æ For more information, see 5.1.4 on page 77, 5.1.5 on page 78 or 5.1.2 on page 77.



•The legal aid applicant completes the means test in the normal manner.

•If the legal aid applicant qualifies for legal aid under the means test, the legal aid

applicant is both indigent and is unable to afford the cost of his/her own legal

representation.

•If the legal aid applicant qualifies under the means test, this ends the enquiry into

the legal aid applicant’s ability to pay for the cost of his/her own legal

representation.

•If the legal aid applicant is seeking legal aid in a criminal case being heard before a

Regional Court or a High Court, but does not pass the means test, and does not

fall within the JCE’s or ROE’s discretion under 5.1.14 or 5.1.15, then legal aid

must be refused and the legal aid applicant must be advised of his/her right to

appeal against the refusal of legal aid in accordance with Annexure L.

Æ See S. 5.1.14 and S. 5.1.15 on pages 83/84.

Æ See Annexure L on page 315.

Appeal to CCMC:

•If the legal aid applicant does not pass the means test as set out in Annexure G1 &

G2, but if the matter otherwise qualifies for legal representation under 4.1.1 or

4.4.2 of this Guide, then the applicant may appeal against the refusal of legal aid

to CCMC.

•The legal aid applicant completes Annexure G3 and must submit a detailed

motivation setting out why he/she will not be able to afford the cost of his/her

own legal representation from his/her own resources having regard to his/her

income, expenditure, assets and liabilities.

•Annexure G3 and the detailed motivation is sent to the Constitutional Case

Management Committee (CCMC) to consider the appeal against refusal of legal

aid and to decide whether or not the legal aid applicant should qualify for legal

representation at State expense.

•In deciding the appeal against refusal of legal aid, the CCMC should consider:

o The income, expenditure, assets and liabilities of the legal aid applicant.

o The nature and number of the charges involved.

o The number of accused involved.

o The court in which the proceedings are to take place.



o The anticipated duration and anticipated cost of the proceedings.

o Any factors relating to the complexity of the case and the personal

circumstances of the accused reported to the CCMC.

•Under section 3(d) of the Act read with 5.1.8, the CCMC may fix conditions for

the payment of a contribution to the Board by the legal aid applicant, which

should, where possible, be made an order of court.

Æ See 4.1.1 on page 36 and 4.4.2 on page 46.

Æ See Annexure G1 & G2 on page 298 and Annexure G3 on page 299.

5.1.2 CHILDREN

applicable to children or their parents or

guardians in all matters as set out in paragraph 4.18.2(b).

5.1.3 SASSA GRANTS

means test.

5.1.4 SINGLE APPLICANTS

A single applicant who has a net monthly income after deduction of income tax of

R5, 500 a month or less will qualify for completely subsidised legal aid.

‘Net monthly income’ includes income from all sources.

3

3 Examples of what is included in net monthly income:

•Salary/wages

5.1.5 HOUSEHOLDS

An applicant, who is a member of a household and whose house hold has a net

monthly income after deduction of income tax of R6,000 a month or less, will

qualify for completely subsidised legal aid.

A ‘household’ means a group of people who live together for at least 4 nights a week

and who share meals and resources.

5.1.6 NET ASSETS



A legal aid applicant or household who do not own immovable property will be

permitted to have net movable assets (including physical and/or intellectual rights to

property) of up to R100,000 without being disqualified under the means test.

A legal aid applicant or household who own immovable property will be permitted

to have net immovable assets and movable assets (including physical and/or

intellectual rights to property) of up to R500, 000, but the applicant/household must

physically reside in the immovable property or at least one of the immovable

properties (where more than one) unless the ROE authorises to the contrary.

‘Assets’ consist of:

•Movable or immovable property, and

•Corporeal or intellectual rights to property.

•Furniture

•A motor vehicle

•A right to occupy a farm under a will

•A right to receive a lump sum payment

•A claim against a debtor

•A sum of money in a bank account

•Shares in a company.

3 Examples of what are not assets:

•A bet on a horse in a race not yet run

•A lotto ticket for next Saturday’s draw

•A hope of inheriting from a person who is still alive.

‘Net assets’ are assets less liabilities. ‘Liabilities’ are debts owed by the legal aid

applicant.

3 Examples of liabilities:

•A mortgage bond

•The balance owing under a credit agreement



•An obligation to pay a sum of money

•A bank overdraft.

3 Examples of what are usually not liabilities (unless the person is in debt):

•Income tax

•Rent

•Maintenance

•Clothing accounts.

5.1.7 INDIGENCE OF GROUPS OR CLASSES OF APPLICANTS

Where it is necessary to determine whether a group or class of persons qualify for legal

aid according to this Guide or Impact Services Policy, the Justice Centre receiving the

legal aid application shall ensure that a sufficient number of means tests are completed

to satisfy Legal Aid SA that a substantial portion of the group or class are indigent. The

ROE should determine the number of individuals of the group or class who should

complete a means test.

PARTIALLY SUBSIDISED LEGAL AID

(a) An applicant who exceeds the means test is not as of right entitled to legal aid

merely because he/she is willing to pay the applicable cost recovery in monthly

contributions. Each case has to be assessed by CCMC on its own merits according

to:

•The criteria relevant to determine whether the applicant will suffer substantial

injustice if legal representation is not provided at State expense;

•Whether the applicant will be able to afford the cost of his/her own legal

representation;

•Whether the applicant is able to adjust his/her standard of living to be able to

afford the cost of his/her own legal representation.

(b) The contribution amount must be paid monthly on advance until that cost recovery

amount is paid in full, cessation of the trial or if the accused is convicted and

sentenced to direct imprisonment, whereafter no further payment will become due

and payable.

(c) Where an applicant’s circumstances change subsequent to the granting of legal aid

subject to the payment of a contribution, then the applicant may motivate to CCMC

for an amendment of the contribution amount.

(d) If the accused fails to pay any contribution due, then legal aid will terminate and the

assigned legal practitioner must advise the accused and the relevant judicial officer

of the termination of legal aid either in writing or in court at the next appearance.



(e) If the assigned legal practitioner is instructed on Judicare, then the Judicare

practitioner must take instruction from the client as to whether the client will

privately fund the practitioner or terminates the practitioner’s mandate.

(f) Where a court in accordance with section 3B of the Act, read with 5.5.3(a), orders

the provision of legal aid where an applicant exceeds the means test, then such court

order must provide for a contribution in accordance with the provisions of the

policy.

Æ See 11.2.3 on page 167 for the procedure relating to the Recovery of Contributions.

(g) In criminal matters the cost recovery as per Table A and monthly contributions

guidelines as per Table B hereto, subject to the discretion of CCMC, may be applied

to any application for legal aid where legal aid is granted to any person whose

monthly income or net assets exceeds the means test.



TABLE A Table A – Cost Recovery per Court Type

Gross Monthly Income

less Income

Tax

Cost Recovery Percentage of

Anticipated Cost

Cost Recovery Amount Taken at Anticipated Cost with regard to the Duration of the Matter

DC RC HC District Court Regional Court

1

Trial Day

2-3 Trial Days

4-5 Trial Days

>5 Trial

Days – Per 5 trial days

or part thereof

1 Trial Day

2-5 Trial Days

6-10 Trial Days

>10 Trial

Days – Per 10 trial

days or part

thereof

1 Up to R8 000 0% 0% 0%

2 R8 001- R12 500 35% 25% 10% R1

070 R1 926

R2 782 R1

484 R3 180 R4 240

3 R12 501- R20 000 75% 40% 20% R2

293 R4 128

R5 962 R2

374 R5 088 R6 784

4 R20 001-R30 000 96% 95% 55% R5

228 R7 552 R5

639 R12 084 R16 112

5 More

than R30 000

100% 100% 90% R7 950 R16 960

Gross Monthly Income

less Income

Tax

Cost Recovery Percentage of

Anticipated Cost

Cost Recovery Amount Taken at Anticipated Cost with regard to the Duration of the Matter

DC RC HC High Court

1

Trial Day

5 Day Trial

10 Day Trial

15 Day Trial

20 Day Trial

>20 Day

Trial – Per 20 trial days

or part thereof

1 Up to R8 000 0% 0% 0%

2 R8 001- R12 500 35% 25% 10% R1

530 R3 060 R4 590 R6 120 R7

650

3 R12 501- R20 000 75% 40% 20% R3

060 R6 120 R9 180 R12

240 R15 300

4 R20 001- R30 000 95% 95% 55% R8

415 R16 830

R25 245

R33 600

R42 075

5 More

than R30 000

100% 100% 90% R27 540

R41 310

R55 080

R68 850

Note 1 The cost recovery amount is based on the Judicare Criminal Tariffs The Grey shaded area indicates that the applicants do not qualify for legal aid assistance.



TABLE B

Table B – Monthly

Contribution per Income

Bracket

Gross

Monthly

Income less

Rate of Monthly

Contribution

Income Tax

DC RC

H

C

Min Max

1

Up to R8

000 0% 0% 0% Contribution Contribution

2

R8 001–R12

500 35% 25%

10

%

Minimum of R300 + 10%

of the amount over R10

000 R300 R550

3

R12 501–

R20 000 75% 40%

20

%

R550 + 17% of the

amount over R12 500 R550 R1 862

4

R20 001–

R30 000 95% 95%

55

%

R1 862 + 27.5% of the

amount over R20 000 R1 862 R4 612

5

More than

R30 000

100

% 100%

90

% As decided by CCMC R4 612

5.1.9 LITIGATION BETWEEN SPOUSES

Where a person applies for legal aid for litigation or possible litigation between

spouses, the applicant must be assessed as a single person.

Spouse refers to the partner of a ‘married person’. In this Guide, a ‘married person’

means:

•A person married under the law of South Africa.

•A person joined in a union recognised under customary or common law as a

marriage/union/universal partnership.

•A civil union partner of a person in a civil union (a marriage or a civil partnership)

entered into under the Civil Union Act 17 of 2006.



5.1.10 INCOME OR ASSETS OF PARENTS, SPOUSES OR OTHER

RELATIVES

No account is taken of the income or assets of the parents, spouses or any other

relative of the legal aid applicant in any matter in which the applicant is entitled to legal

aid under section 35 of the Constitution.

The income of parents or guardians of a child is taken into account in civil matters,

as set out in 4.18.3.

E See 4.18.3 on page 66.

The income of parents, guardians, spouses, life partners or children of a mental

health care user is taken into account, as set out in 4.19.

E See 4.19 on page 72.

5: 5.1.11 PROPERTY AND MONEY FROM A DECEASED ESTATE

In determining the property of a legal aid applicant or his/her spouse, the person

receiving the legal aid application must take into account any property (including

money) that a legal aid applicant is, or will be entitled to receive, from the estate of

any deceased person.

This is taken into account even though:

•No distribution account has been drawn up.

•The legal aid applicant or his/her spouse has not yet taken transfer of or received

delivery of the property.

•The property is held in the name of the estate or in the name of a trust.

5.1.12 TRUST/COMPANY/LEGAL PERSONALITY ASSETS

If any assets are owned by a trust, company or other legal personality but controlled

either directly or indirectly by the legal aid applicant or his/her spouse, dependant,

sibling, parent, descendant or nominee for the direct or indirect benefit of the legal aid

applicant or his/her spouse, dependant, sibling, parent, descendant or nominee, such

assets shall be deemed to be owned by the legal aid applicant for the purposes of

determining whether the legal aid applicant qualifies for legal aid.

Where there are beneficiaries other than the applicant and/or his/her spouse, dependant,

sibling, parent, descendant or nominee, the applicant is deemed to be the owner of

his/her percentage share of the said assets.

5.1.13 MAINTENANCE AND GRANTS

Maintenance or any grant received for a dependent must be included in income.



5.1.14 JCE’S DISCRETION

A JCE has the discretion to authorise fully subsidised legal aid for any applicant who is

over the means test by up to R1,500 a month in respect of gross income for all matters.

The JCE’s decision will then be sent to the person receiving the legal aid application.

5.1.15 ROE’S DISCRETION

A ROE has the discretion to authorise fully subsidised legal aid for any applicant

who is over the means test by up to R3,000 a month in respect of gross income for

all matters.

A ROE has a discretion to authorise fully subsidised legal aid for any applicant who

is over the means test by up to R100,000 in respect of net assets for all matters.

The ROEs decision will then be sent to the person receiving the legal aid application.

5.2 Proof of qualification

In general, an applicant for legal aid must satisfy the JCE that he/she is a natural

person, who is indigent as set out in this Guide. The documentary proof of income,

value of assets and other relevant information must be verified where possible.

5.2.1 DOCUMENTARY EVIDENCE

Whenever possible, the person receiving the legal aid application must obtain

documentary evidence of income, assets and liabilities. This includes copies of trust

deeds and financial statements of trusts in the circumstances set out in 5.1.12.

ge 83.

All documentary evidence, together with the completed means test, must accompany the

application form.

5.2.2 PROOF OF INCOME AND ASSETS

Proof of income, or State grant or old age pension, must be submitted with the legal aid

application, with whatever supporting documents are available.

3

3 Examples of proof of income:

•An official salary voucher



•A letter of confirmation from the employer

•A certified statement of income and expenditure

•Any relevant tax assessment or bank statements

•Certificates of investments

•Documentary evidence on all issues referred to in Annexures G1, G2 or G3.

page 299.

5.2.3 WRITTEN DISCLOSURE OF ASSETS

Legal Aid SA may ask a legal aid applicant to make a written disclosure of all assets

and to consent in writing to the release to Legal Aid SA of all information required.

Æ For information on the privacy and confidentiality of information given to Legal

Aid SA, see 10.1 on page 141.

5.2.4 A PERSON WITHOUT INCOME

If legal aid is granted to a person without income, the reason why the person has no

income must be stated briefly on the LA1 application form. The person receiving the

application must explain to the applicant the consequences of a false statement about

their income or assets, and that they may face prosecution for giving false information.

5.2.5 FURTHER FACTORS AFFECTING QUALIFICATION

After checking minimum basic requirements for qualifying for legal aid, JCEs must

also be guided by:

•The magnitude of the risk – in other words, the likely costs of providing legal aid

in a particular matter.

•The likelihood of the legal aid applicant not qualifying for legal aid

after further enquiry.

•The available resources to render legal aid in non-litigious matters.

Æ For more on non-litigious matters, see 4.9.1(I) on page 53 and 4.12 on page 58.

If the JCE decides that there is a high risk relating to costs or that an applicant is not

likely to qualify after further enquiry, then the matter should be referred to the ROE or

CCMC under 5.2.6.



5.2.6 HIGH COST AND HIGH RISK MATTERS

ROEs and the CCMC will monitor high cost and lengthy duration matters where the

costs exceed R 50,000 or ensues for longer than 20 trial days.

The ROE or CCMC will choose whether or not to request a forensic enquiry before

deciding whether or not the application for legal aid is to be granted.

Æ See also 10.7 on pages 149 to 152 on forensic investigations where fraud and abuse

of legal aid is suspected.

5.3 Legal aid under the Constitution

Under the Constitution, Legal Aid SA must determine ‘where substantial injustice

would otherwise result’ if legal aid was not given. This is limited

by section 36 of the Constitution and any relevant legislation giving content to the rights

in the Constitution.

Æ For more on substantial injustice, see 4.1 on page 35, 4.9 on page 50 and 4.18.1 on

page 65.

5.3.1 URGENT DECISIONS

Where the urgency of the case demands it, the person receiving the legal aid application

may communicate the information in Annexures G2 and G3 to the JCE telephonically

with a view to getting an urgent decision.

nnexure G1 & G2 and G3 on page 298 and 299.

5.3.2 CHILDREN

For legal aid under section 35(3)(g) of the Constitution, a child will not have to

qualify for legal aid through any means test if the child needs legal representation

for a criminal case.

For legal aid under section 28(1)(h) of the Constitution, read with any relevant

legislation, a child will have to quality for legal aid, as set out in 4.18.

Æ See 4.18.1–3 on pages 65 and 66.

Legal Aid SA may decide to make a claim against the parents to recover the costs

incurred, if the parents could afford to provide legal representation for the child as a part

of their duty of support, and failed, refused or neglected to do this.

5.4 Legal aid in civil cases under the Legal Aid Act



Owing to financial limitations, Legal Aid SA is forced to restrict the aid it provides and

in certain cases must decline to offer assistance.

– 4.19 on pages 50 to 72 for details.

Legal Aid SA uses the requirements set out in 5.4.1 and 5.4.2 to assist in determining

qualification for legal aid in civil cases.

5.4.1 PROSPECTS OF SUCCESS ON A BALANCE OF

PROBABILITIES

To qualify for legal aid in a civil case, the applicant’s case must have, on a balance

of probabilities prospects of success and where applicable, prospects of

enforcement.

5.4.2 DUTY ON LEGAL PRACTITIONER

Before a legal practitioner enters into or continues with litigation on a legal aid

basis, he/she must:

•Be satisfied that the client in a civil case has prospects of success on a balance of

probabilities, and

•Convince the JCE by written report and response that there is a prospect of

success, and where applicable, prospects of enforce-ment on a balance of

probabilities.

5.4.3 MATTERS WHERE MERIT REPORT IS NOT REQUIRED

A merit report for civil legal is not required in the following cases:

•simple divorces;

•eviction cases, where assistance can be granted to negotiate with the owner to

allow the clients some time in the property;

•uncontested divorce;

•domestic violence to protect the best interest of the child;

•administration of estates.

5.5 Formal application for legal aid

5.5.1 PERSONS WHO MAY RECEIVE LEGAL AID APPLICATIONS

These persons may receive legal aid applications when the need arises:



(a) Any person who is admitted to practise as an attorney or as an advocate, and who is

employed by Legal Aid SA.

(b) A candidate attorney employed by Legal Aid SA’s Justice Centre.

(c) The administrative staff employed at Legal Aid SA’s Justice Centres.

(d) Administrative Managers at Justice Centres.

(e) Paralegals at Justice Centres.

(f) Agent legal aid officers of the Department of Justice and Constitu-tional

Development.

(g) A person who is, in the opinion of the NOE, a fit and proper person to act.

Based on a good reason, the NOE may also withdraw the authority of any person to

receive legal aid applications.

Where the application is received by a person mentioned in (a) or (b)

above, they may immediately render legal services to the applicant where it prima facie

appears that the applicant qualifies for legal aid.

5.5.2 PERSONAL APPLICATION

An applicant for legal aid must apply for legal aid by calling on a person who may

receive legal aid applications personally, or personally submitting a completed

application.

(a) An application for legal aid by or on behalf of a child must be dealt with as set

out in 4.18.2.

Æ See 4.18.2 on page 65.

3 Example of non-personal application:

If a personal application is not possible in exceptional circumstances, a close

relative or another responsible person, who has personal knowledge of the

circumstances, may give the particulars and sign the application for legal aid on

behalf of the person applying for legal aid.

Where practical, persons receiving legal aid applications should discourage the

practice of submitting legal aid applications through other people.

No person who has an interest in the outcome of a legal aid application may receive



the legal aid application.

3

3 Examples of people with an interest:

•A Judicare legal practitioner,

•The employee or agent of a Judicare legal practitioner.

5.5.3 REPORTS TO COURTS IN CRIMINAL CASES AND

CONTRIBUTIONS ORDERED BY COURTS

Under section 3B(1) of the Act, a court must, before directing that a person has a right

to legal representation at State expense, refer the case for evaluation and report by Legal

Aid SA.

ROEs must liaise with Chief Magistrates, Regional Court Presidents and the Judge

President of any High Court that has its permanent seat within the area of the Justice

Centre.

(a) 4-stage approach to direction for legal aid by court

JCEs should liaise with judicial officers to arrange for the practical application of

section 3B(1)(b) of the Act in these 4 stages:

First

•A court should first advise an accused of the right to legal representation under

section 73(2A) of the Criminal Procedure Act, as amended by Act 86 of 1996,

and allow the accused a reasonable opportunity to get legal assistance under

section 73 of the Criminal Procedure Act.

Second

•If the accused is refused legal aid, the accused should appeal against the refusal to

the ROE and if unsuccessful, to the NOE.

Third

•The court may refer the case to Legal Aid SA for evaluation and report under

section 3B(1)(b) of the Act if the accused reports to the court at a later date that:

o He/She applied for legal aid, but was refused, and

o The appeal against refusal of legal aid to the ROE and NOE was

unsuccessful or that he/she did not receive a reply to the application/

appeal within a reasonable period of time.

Fourth

•The court may conduct an inquiry into the means of the applicant and for this



purpose may:

o Subpoena the legal aid applicant, other witnesses and documents

o Require the legal aid applicant and other witnesses to give evidence under oath

and to be subjected to cross-examination.

(b) Limiting the number of Legal Aid SA reports

As legal aid is in practice granted to the vast majority of criminal accused who apply,

the 4-stage approach in 5.5.3 (a) aims to reduce the number of reports that JCEs have to

draft and to make best use of Legal Aid SA’s limited resources, funds and personnel.

Wherever possible, judicial officers should be requested by their Judges President,

Regional Court Presidents or Chief Magistrates to avoid calling upon Legal Aid SA

to evaluate and report on cases unless and until legal aid is refused and any appeal

against the refusal of legal aid is finalised.

The 4-stage approach also forces the legal aid applicant to exhaust his/her internal

remedies before approaching the court for help.

(c) Reporting to the court

If a JCE is requested by a court to evaluate and report on whether an accused should get

legal representation at State expense, the JCE must consider the application under the

provisions of this Guide.

Æ For the procedure for compiling this report under section 3B of the Act, see 11.2.1

on page 166.

(d) Court ordering recovery of costs

Under section 73(2C) of the Criminal Procedure Act, as amended by Act 86 of 1996, a

court may order that the costs or portion of the costs of legal representation provided at

State expense must be recovered from the accused.

Under section 3(d) of the Act, Legal Aid South Africa may also fix conditions for the

payment of a contribution to the Board by the legal aid applicant, especially when the

legal aid applicant exceeds the means test but is granted legal aid at State expense after

the assessment under Step 3 of the means test enquiry in 5.1.1 on page 75.

The contribution to be paid by the legal aid applicant will be determined by Legal Aid

South Africa in accordance with the powers set out in section 3(d) of the Act. The

contribution to be paid by the legal aid applicant should be made an order of court,

wherever possible.



Æ For the procedure for advising the legal practitioner about the court order, see 11.2.2

on page 167.

(e) Duties of private legal practitioner

Unless the court order directs otherwise, Legal Aid SA will expect the legal practitioner

to collect the contribution ordered by the court from the accused before submitting a

final account to Legal Aid SA.

Legal Aid SA will thus deduct the amount of contribution from the amount due to the

legal practitioner, whether the legal practitioner has in fact collected this contribution or

not.

(f) Recovery of costs under court order

Unless the court order directs otherwise, in cases where Legal Aid SA employs the

instructed legal practitioner, the JCE with the assistance of the practitioner must recover

the contribution of the legal aid applicant before plea.

Æ For the procedure for depositing contributions recovered in (e) and (f), see 11.2.3 on

page 167.

5.5.4 APPLICATIONS FOR CIVIL CASE CONTINUATIONS

In a legal aid application for the continuation of a civil case on legal aid where legal aid

was not previously granted in the matter, the applicant or his/her attorney must send the

JCE a full merit report before an instruction is issued.

Æ For the details to include in the report, see 11.3.2 on page 171.

The JCE must consider the merit report. If the JCE decides that the matter has

prospects of success on a balance of probabilities, then legal aid may be granted

ANNEXURE “C”

Done and entered into between

............................................................................................................................. ...................

...................................................................................................... .........................................,

* full name and address/name of business, full name of authorised representative and address)

hereinafter called 'the Client', and

............................................................................................................................. ...................

...................................................................................................... ..........................................

(full name of attorney, name of practice and address)

http://ipproducts.jutalaw.co.za/nxt/gateway.dll/strg/sargstat/312/20675/21094/21095?f=templates$fn=document-frameset.htm$q=%5bfield%20folio-destination-name:%27Regs:a66of1997_gnr547y99%27%5d$x=Advanced#end_0-0-0-32301



hereinafter called ''the Attorney',

in terms of which the Client shall pay the fees agreed to herein to the Attorney for services rendered2 , if the Client

is successful in such proceedings to the extent set out in this agreement.

1 It is recorded that in the opinion of the Attorney there are reasonable prospects that the Client may be successful

in the proceedings mentioned hereunder and the Attorney therefore undertakes to recover no fees from the Client

unless-

1.1 the Client is successful in such proceedings; or

1.2 the Attorney, as set out hereunder, becomes entitled to a fee in the event of partial success in such proceedings

or in the event. of the premature termination of this agreement.

2 It is further recorded that, before the signing of this agreement and in terms of section 3(3) of the Contingency

Fees Act, 1997 (Act 66 of 1997), the Client was-

2.1 advised of any other ways of financing the litigation and of their respective implications,

namely ...................................................................................................................... ......................;

2.2 informed of the normal rule that in the event of the Client being unsuccessful in the proceedings, he/she/it may

be liable to pay the taxed party and party costs of his/her/its opponent in the proceedings; and

2.3 informed that he/she/it will be liable to pay the success fee in the event of success,

by the Attorney.

3 The Client acknowledges that he/she/it gave a written power of attorney to the Attorney to-

** conduct proceedings in/before the............................ (court of law/tribunal/ functionary) having the power of a

court of law to ......................................, on his/her/its behalf.

** conduct proceedings in/before the ............................ (court of law/tribunal/ functionary) having the power

to ..............................................................., on his/her/its behalf.

** render professional services, namely ........................................................., to him/her/it.

** conduct arbitration proceedings in/before the ............................................... for the purpose

of ......................................................, on his/her/its behalf.

Nota bene: No contingency fees agreement may be entered into in respect of professional services to be rendered in

any criminal proceedings or any proceedings in respect of any family law matter.3

4 The parties agree that the Client-

4.1 shall be deemed to be successful in the aforementioned proceedings

if .......................................................................................................; and

4.2 shall be deemed to be partially successful in the aforementioned proceedings

if .............................................................................................. ..................

5 The attorney hereby warrants that the normal fees on an attorney and own client basis to perform work in

connection with the aforementioned proceedings are calculated on the following

basis: ........................................................................................... .

(set out hourly, daily and/or applicable rates)

6 The parties agree that if the Client is successful in the aforementioned proceedings-

** an amount of R.............. shall be payable to the Attorney;

** an amount shall be payable to the Attorney, calculated according to the following

method: ...................................... ............................................ .

Nota bene: If the success fee is higher than the Attorney's normal fees, such higher fee may-

� not exceed the Attorney's normal fees by more than 100 per cent; and

� in the case of a claim sounding in money, not exceed 25 per cent of the total amount awarded or any

amount obtained by the Client in consequence of the proceedings.

For purposes of calculating the higher fee, costs are not included.

7 The parties agree that-

7.1 if the Client is partially successful in the aforementioned proceedings-

7.1.1 the Client

** shall owe the Attorney an amount of R................ ; or

** shall owe the Attorney an amount to be calculated according to the following

method : ............................................ ....................................................................... .................. ; and

7.1.2 the following consequences will follow in terms of this

agreement: ........................................................................................................ ; and

7.2 in the event of the premature termination of this agreement for any reason-

7.2.1 the Client-

** shall owe the Attorney an amount of R................... ; or














** shall owe the Attorney an amount to be calculated according to the following

method : ......................................... .................................................................. ....................... ; and

7.2.2 the following consequences will follow in terms of this agreement:

................................................................................................ .

8. Disbursements by the Attorney relating to the matter-

** made on behalf of the Client shall be dealt with in the following

manner: .................................................................................................... ; and/or

** incurred on behalf of the Client shall be dealt with in the following manner:

............................................................................................................ .

9.1 The Client has a period of 14 days, calculated from the date of signing this agreement, during which he/she/it

will have the right to withdraw from the agreement by giving notice to the Attorney in writing.

9.2 The Attorney shall, in the event of withdrawal by the Client, be entitled to fees and disbursements in respect of

any necessary or essential work done to protect the interests of the Client during such period, calculated on an

attorney and client basis.

10 If the Client feels aggrieved by any provision of this agreement or any fees chargeable in terms of this

agreement, the agreement or the fees may be referred for review to the Law Society of which the Attorney is a

member and, if an advocate has been appointed, also to the Bar Council in the area in which the advocate practises.

The professional controlling body concerned may set aside any provision of this agreement or any fees claimable in

terms of this agreement if in its opinion such provision or fees are unreasonable or unjust.

11.1 Any amendment or other agreements ancillary to this agreement (including any amendments to such

agreements) shall be in writing and comply with the requirements laid down in the Contingency Fees Act, 1997 (Act

66 of 1997).

11.2 A copy of any such amendment or other agreements ancillary to this agreement shall be delivered to the Client

upon the date on which such amendment or ancillary agreement is signed.

**12 In the event of an advocate being appointed, the following shall be completed:

12.1 On this ......... day of .............................. 19..., the Attorney briefed

....................................................................................................

...................................................................................................,

(full names and address of advocate)

(hereinafter called 'the Advocate') to act as advocate in the proceedings mentioned in paragraph 3 above.

12.2 By his/her signature hereto the Advocate warrants that in his/her opinion there are reasonable prospects that

the Client may be successful in such proceedings and that he/she accepts the brief on the understanding that he/she

will be entitled to the payment of fees only if the Client is successful or partially successful in the proceedings as

agreed upon in paragraph 4 above and in the event of the premature termination for any reason of this agreement.

12.3 The parties agree that-

(a) if the Client is successful in the aforementioned proceedings-

** an amount of R..................: shall be payable to the Attorney as advocates' fees; or

** an amount shall be payable to the Attorney as advocates' fees, to be calculated according to the following

method : ............................. ...................................................................................... .................; or

(b) if the Client is partially successful in the aforementioned proceedings-

** an amount of R................ shall be payable to the Attorney as advocates' fees; or


method : ................................ ................................................................................... .................. ; or

(c) in the event of the premature termination of this agreement for any reason-

** an amount of R................ shall be payable to the Attorney as advocates' fees; or


method : .......................................

........................................................................................................... .

THE CLIENT HEREBY WARRANTS THAT HE/SHE/IT UNDERSTANDS THE

MEANING AND PURPOSE OF THIS AGREEMENT.

Signed at ...................... this ....... day of...........................19... .4













..................................................

(Signature of the* Client / authorised representative of juristic person)

.................................................

(Signature of the Attorney)

** ..............................................

(Signature of the Advocate)

* Delete whichever is not applicable

** Delete if not applicable

1 A copy of the contingency fees agreement must be delivered to the Client on the

date on which the agreement is signed.(Section 3(4) of the Contingency Fees Act, 1997

(Act 66 of 1997))

(Section 3(4) of the Contingency Fees Act, 1997 (Act 66 of 1997))


2 In terms of section 2 of the Contingency Fees Act, 1997, a legal practitioner is,

when he/she enters into a contingency fees agreement with a client, not entitled to any

fees for services rendered in respect of any proceedings unless the client is successful in

such proceedings to the extent set out in such agreement.

The agreement may stipulate that the legal practitioner shall be entitled to fees equal to

or higher than his/her normal fees.

Fees which are higher than the normal fees of the legal practitioner concerned

(hereinafter referred to as the 'success fee') may not exceed such normal fees by more

than 100 per cent.

In the case of claims sounding in money, the total of the success fee payable by the

client to the legal practitioner, may not exceed 25 per cent of the total amount awarded

to or any amount obtained by the client in consequence of the proceedings concerned,

which amount may not, for purposes of calculating such excess, include any costs.





3 A contingency fees agreement may be entered into in respect of-

(a) any proceedings in or before any court of law or any tribunal or functionary

having the powers of a court of law;

(b) any proceedings in, or before any court of law or any tribunal or functionary

having the power to issue, grant or recommend the issuing of any licence, permit or

other authorisation for the performance of any act or the carrying on of any business or

other activity;

(c) any professional services rendered by the legal practitioner concerned; and

(d) any arbitration proceedings,

but not in respect of any criminal proceedings or any proceedings in respect of any

family law matter.(Section 2 of the Contingency Fees Act, 1997, read with section

(1)(v))



http://ipproducts.jutalaw.co.za/nxt/foliolinks.asp?f=xhitlist&xhitlist_x=Advanced&xhitlist_vpc=first&xhitlist_xsl=querylink.xsl&xhitlist_sel=title;path;content-type;home-title&xhitlist_d=%7bsargstat%7d&xhitlist_q=%5bfield%20folio-destination-name:%27PW261670fn1_Ref%27%5d&xhitlist_md=target-id=0-0-0-32295

http://ipproducts.jutalaw.co.za/nxt/foliolinks.asp?f=xhitlist&xhitlist_x=Advanced&xhitlist_vpc=first&xhitlist_xsl=querylink.xsl&xhitlist_sel=title;path;content-type;home-title&xhitlist_d=%7bsargstat%7d&xhitlist_q=%5bfield%20folio-destination-name:%27PW261671fn*_Ref%27%5d&xhitlist_md=target-id=0-0-0-32299


http://ipproducts.jutalaw.co.za/nxt/foliolinks.asp?f=xhitlist&xhitlist_x=Advanced&xhitlist_vpc=first&xhitlist_xsl=querylink.xsl&xhitlist_sel=title;path;content-type;home-title&xhitlist_d=%7bsargstat%7d&xhitlist_q=%5bfield%20folio-destination-name:%27PW261673fn**_Ref%27%5d&xhitlist_md=target-id=0-0-0-32307







(a) any proceedings in or before any court of law or any tribunal or functionary

having the powers of a court of law;

(b) any proceedings in, or before any court of law or any tribunal or functionary

having the power to issue, grant or recommend the issuing of any licence, permit or

other authorisation for the performance of any act or the carrying on of any business or

other activity;

(c) any professional services rendered by the legal practitioner concerned; and

(d) any arbitration proceedings,

(Section 2 of the Contingency Fees Act, 1997, read with section (1)(v))















4 A contingency fees agreement must be signed by the client concerned or, if the

client is a juristic person, by its duly authorised representative, and by the attorney

representing such client. Where an advocate is briefed, the contingency fees agreement

must be countersigned by the advocate, who will thereby become a party to the

agreement.(Section 3(2) of the Contingency Fees Act, 1997)

(Section 3(2) of the Contingency Fees Act, 1997)


** Delete if not applicable.
















http://ipproducts.jutalaw.co.za/nxt/foliolinks.asp?f=xhitlist&xhitlist_x=Advanced&xhitlist_vpc=first&xhitlist_xsl=querylink.xsl&xhitlist_sel=title;path;content-type;home-title&xhitlist_d=%7bsargstat%7d&xhitlist_q=%5bfield%20folio-destination-name:%27PW261693fn*_Ref%27%5d&xhitlist_md=target-id=0-0-0-32387






Santiago Pereira Campos

NATIONAL REPORT: URUGUAY

Legal Aid

Legal aid is available to litigants in our jurisdiction. The state provides public

defenders to people otherwise unable to afford legal representation. Legal assistance is

provided through so-called "Defensorías Públicas" that are located in the judiciary

institutionally.

Legal aid is available to all civil claims, with amount limitation. The general

income of the person in order to access to a public defender has to be under $ 18.000

(around 800 dollars per month). Legal aid is also provided by Law Schools though

their Legal Advice Centres, where law students get to have a practical experience,

supervised by legal practitioners.

In Uruguay there has not been a reduction in coverage and scope of legal aid.

The public defenders assist 250.000 persons per year. The general income of the person

in order to access to a public defender has to be under $ 18.000 (around 800 dollars per

month). The right to an attorney and legal aid are rights established in the Constitution

and cannot be abolished. In fact, many people with low incomes cannot afford a

lawyer.


We do not have this specific type of insurance in our country, nonetheless, we

have a professional indemnity insurance that lawyers, public notaries, real estate brokers,

auditors, multimedia companies -among others- can hire to cover such risk.

The extent of the coverage includes several risks, such as professional liability

for wrongful actions, defence expenses, the loss of clients’ documents -including

computerized records. However, are exceptional the cases of lawyers who use this

type of insurance in Uruguay.


Contingency Fee Agreements do exist in our country for all type of civil claims.

That kind of agreements has some particularities. For example, according to the

Uruguayan Bar Association rules, the maximum fee tariff is 50% of the economical

benefit the client obtains.

Santiago Pereira CAMPOS (Uruguay)


The rules also establishes a minimum fee tariff, article 11 sets it on non less than

15 U.R (approx. 500 dollars). Notwithstanding the foregoing, joining the Bar

Association in Uruguay is not mandatory, so these rules are useful anyway as standards

to fulfil.

Sometimes the Contingency fee agreements follow the “no win no fee” rule.

Generally Contingency fee agreements in Uruguay don´t follow the “no win no fee”

rule, meaning lawyers usually charge a fixed sum and a percentage of what the client

may win in the case. If the client loses, the lawyer charges only the fixed amount agreed

in advance. These agreements do not have a specific regulation so they depend on the

will of the parties.

There are no official numbers, but contingency free agreements are usual in

Uruguay.

Third Party Funding

Although Third party funding is not forbidden, it is not very common, and if it

happens, it has not been made public. It is not possible therefore to describe how, or the

extent to which, it takes place.



Date post:	08-Jan-2019
Category:	Documents
Upload:	lythu
View:	214 times
Download:	0 times

Session 3: Effective Access to Justice - UFRGS · Alvim Wambier (Catholic University of São Paolo,...

Documents