Pro bono scheme could direct costs to charities

In a move that could see charities receiving hundreds of thousands of pounds of extra income, The Law Society and Bar Council are in talks to launch a pro bono conditional fee agreement scheme.

The proposals are intended to remedy the current situation in which defendants losing cases against charity or other ethical claimants are frequently spared having to pay the claimant’s legal costs because the claimant’s lawyers are working on a pro bono basis.

Under the proposed scheme, unsuccessful defendants would instead contribute the equivalent sum directly to the claimant charity. Some of the money could also be used to refund the pro bono lawyers’ disbursement costs.

Mike Napier, senior partner at Irwin Mitchell and the Attorney General’s pro bono envoy, is helping to facilitate the process through the Attorney General’s pro bono coordinating committee.

Napier said: “The idea is still in the embryonic stage. It’s on course, but there’s a lot of work yet to do. We need to work on a detailed draft and to resolve the question of the immediate destination of the funds.”

A potential hurdle for the scheme is HM Revenue & Customs, which has suggested that lawyers may be subject to taxes on the money if they act as the middlemen between the defendants and their clients.

“If people have to pay tax on fees they haven’t received, that would be a disincentive,” Napier said.

Under Schedule 4 of the Courts and Legal Services Bill, the proposals must also be approved by the senior judiciary.