The new Funding Code will apply a set mathematical formula to cases and will be used by the new Legal Services Commission to administer the legal aid system.
The code, which is being set up as part of the new Access to Justice legislation, is based on the principle that "legal aid should only be granted in circumstances where a case is sufficiently strong that a private paying client would invest his or her money in the litigation".
In cases which are assessed as having a very good or 80 per cent chance of success, applicants will be granted legal aid, provided the estimated damages they are likely to win exceed the estimated costs of the case.
Those cases which have a good or 60 to 80 per cent chance of success qualify only if the estimated damages won will be at least three times the likely costs of the case.
Where the chances of success are only moderate or 50 to 60 per cent, the applicant must be expected to win damages more than four times the amount spent in bringing the case.
If the case has less than an even chance of success the applicant will be refused and would have to seek a lawyer who would be willing to take the case on a conditional fee basis.
With the annual bill for legal aid running at pounds 1,670m, the Government is anxious to avoid unnecessary waste of public funds.
Launching a consultation paper on the code yesterday, Steve Orchard, chief executive of the Legal Aid Board which will be replaced by the new commission, said the code would ensure value for money for the taxpayer. He said: "Cases will have to satisfy the new stringent criteria to receive public funding. Those whose cases do not, will know their cases are not strong enough or are of lower priority or are more suitable for being funded in the private sector by conditional fee agreements with lawyers."
He added that research by the board had shown the chances of success of a case could be estimated in advance with a good deal of accuracy.
But Vicki Chapman, policy director of the Legal Action Group, which campaigns for equal access to justice, said the code was likely to cause many deserving cases to be denied legal aid. She said: "People bringing these claims are by definition of limited resources. Relatively small amounts of damages could be of enormous importance to them and demanding that they win three or four times their costs is being unduly restrictive."
Richard Miller, a solicitor and chairman of the Legal Aid Practitioners Group, said the calculations were likely to be unfairly stacked against the applicant. He said: "The estimated costs would include the amount incurred going to court, even though many of these cases are settled well before they reach that stage."
A spokesman for the Law Society said: "We fear this is just a mechanism for turning down more people for legal aid."Reuse content