Litigation
Assistance Fund (LAF)
The
Litigation Assistance Fund (LAF) is a non-profit charitable trust for
which the Law Society acts as trustee. It began operations in 1992.
Since then it has provided funding assistance to approximately 1,500
civil claimants in South Australia. The damages ultimately received
by those claimants totals in excess of $200 million.
Rule
16A of the Australian Solicitors’ Conduct Rules requires
South Australian solicitors to inform their clients about LAF in
certain circumstances.
Who
can apply for LAF funding and how is this done?
LAF
receives applications for funding assistance from solicitors on
behalf of civil claimants seeking compensation/damages who are unable
to meet the fees and/or disbursements of prosecuting their claim. The
applications are subjected to a means test and a merits test, and the
final decisions on the applications are made by Assessment Panels
and/or the Advisory Board of LAF, which are constituted of senior
practitioners. Applications can be made at any time during the course of a claim. If funding is granted, it is granted on a 'stage by stage' basis. Small or large amounts of funding can be sought - including for only some of the claim's disbursements.
An
application form (see below) must be completed by both the applicant
and the applicant's solicitor. There is no application fee for
Pension Card or Automatic Issue Health Care Card holders, but
otherwise the application fee is $100, or $250 for an urgent
application. Solicitors should have regard to section 14A of the
Legal Practitioners Act 1981 (SA).
LAF
cannot assist in family law or defacto relationship law matters
including those involving property issues.
Most applicants to LAF are personal injury claimants. LAF suggests that claimants/solicitors with a different type of civil claim, who are considering applying, first contact the LAF Manager, Annie MacRae, for a brief discussion
The
two different types of possible funding
LAF
provides two different forms of funding – Disbursements Only
Funding (DOF) and Full Funding. The
distinction is important.
In
summary, in
DOF matters,
claimants receive funding only to meet disbursements, and this does
not include counsel fees. In
DOF matters, it is a condition of the grant of assistance that the
solicitor (and any counsel) enter into a contingency fee agreement
with the claimant which establishes that in the event of the action
being unsuccessful the solicitor and counsel will not charge the
claimant.
In
Full
Funding matters,
claimants receive funding to meet solicitor/counsel fees as well as
any disbursements.
The Fund pays "solicitor/client costs" (not "solicitor/own
client" costs) on the scale appropriate to the jurisdiction.
Most
of the matters currently funded by LAF are DOF matters. LAF suggests that claimants/solicitors who are considering applying for Full Funding, first contact the LAF Manager, Annie MacRae, for a brief discussion.
How
is LAF itself funded and how does this affect the claimants?
LAF
received an initial grant of funding upon its inception in 1992, but
does not receive any ongoing government funding or any donations or
grants. Instead, it funds itself by receiving a relatively small
portion of the monetary proceeds (usually damages) achieved by the
claimants whom it assists. Claimants who received DOF funding repay
the amount received, plus an uplift of 100% on that amount. However, for new applications received from 1 January 2023 where liability is already admitted (and where LAF decides to grant funding due to being satisfied as to the other usual requirements, eg: quantum), that uplift figure will be 50% rather than 100%. Claimants
who received Full Funding repay the amount received, plus 15% of
their damages. This ensures LAF’s ability to continue to provide
assistance. Claimants whose claims are ultimately unsuccessful are
not required to make any repayment to LAF (and nor are their
solicitors).
However,
the
Fund does not pay costs awarded in favour of another party against
the claimant.
How
are applications to LAF assessed and why is this the case?
The
self-funding model is one of the reasons applications to LAF are
subjected not only to a means test but also to a
merits
test.
In essence, a decision is made as to the likelihood of the claim
succeeding (as well as its likely quantum and the recovery prospects)
because LAF can only continue to assist claimants if it regularly
receives the repayment and uplift amounts which flow from successful
cases. The repayment and uplift amounts received are used entirely
for the continued operation of LAF. This, of course, is the crucial
difference between LAF, which is a non-profit charitable trust, and
commercial/private litigation funders, which can receive vastly higher
portions of claimants’ damages for commercial profit purposes.
To
satisfy the
means
test,
the applicant can have a family income of up to $150,000, and assets
of “reasonable” value including a house and car.
What
is a real-life example of a LAF-funded claim?
Claimant
A suffered a serious infection during surgery which was not diagnosed
expeditiously. He was subsequently assessed as having substantial
damage to his shoulder as a result of the infection. LAF provided
Disbursement Only Funding (DOF) to enable:
- a report to be obtained as to the standard of the medical care
provided;
- reports in respect of quantum to be obtained from an occupational
physician, a psychologist and an occupational therapist; and
- payment of a District Court filing fee given an impending
limitation date.
The
claim settled in the sum of approximately $150,000 all-inclusive. The
DOF funding provided by LAF totalled $5,535. The claimant repaid to
LAF from the settlement funds that amount of $5,535, together with
the 100% uplift; ie the total payment by the claimant to LAF was
$11,070.
Where
does LAF fit in?
As practitioners
know, government-funded representation is often available to
under-resourced litigants in criminal matters and family matters.
When it comes to civil matters, this is not usually the case. Civil
litigants can access a variety of free or low-cost services offering
one-off general advice but often not ongoing representation. In many
instances, this gap is filled by civil litigation practitioners
prepared to act on a contingency or even pro bono basis. The
profession is well aware of the valuable role played by JusticeNet in
the pro bono context. However, this is not a complete answer. In some
cases, firms are able to act on a contingency basis, but not able to
incur disbursements on behalf of their clients. Sometimes the scale
of a matter, or its longevity, will make it impossible for a firm to
act on a contingency basis. The list of potential hurdles is a long
one. In many such cases, LAF is able to assist.
Some final important considerations
LAF recommends that claimants who are considering applying to LAF ask/remind their solicitor to consider carefully whether an application to LAF is the most appropriate course in the circumstances of the claim. In particular, claimants/solicitors should investigate whether there may be other and better potential methods of obtaining funding/representation in relation to the claim.
It should be noted that, if an application to LAF is approved, claimants and their solicitors are asked to enter into a Funding Agreement with LAF. This gives LAF certain rights and powers, including that funding can be withdrawn and/or varied.
Further, it should be noted that, in relation to DOF funding, if during the life of the claim the claimant can afford to fund some of the disbursements themselves, it may be in their interest to do so, due to the 100% uplift.
The
Forms and the Rules
For
DOF applications:
Application form
Rules
For
Full Funding applications:
Application form
Rules
Further
information
For
further information about the Fund, please contact the Manager of the
Fund, Annie MacRae, using the contact details below.
annie.macrae@lawsocietysa.asn.au
Telephone:
(08) 8229 0263
Level
10, 178 North Terrace ADELAIDE SA 5000
GPO Box 2066 ADELAIDE SA
5001