Kerry Underwood

CROWD FUNDING, COST CAPPING AND TAXPAYERS

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A recent decision by the High Court to grant a cost capping order of £250,000 in a claim against the government, relating to the lawfulness of contracts for protective equipment awarded during Covid-19, has attracted publicity, with the claimants accusing the Government of bullying, by stating that it would cost £1 million to defend the claim.

The claimants had asked for a cost-capping order of £100,000.

The claimants are Crowd-funded and had raised around £250,000 through the CrowdJustice website to fund the case. It is probably no coincidence that that is the sum that the court ordered as the cap.

The assumption is that Crowd funding, costs-capping and not for profit equal good and worthy and that those apposing it here were trying to ensure that those bringing in the case were “bullied out by costs” (Good Law Project) and that the government was attempting to “intimidate” campaigners into dropping the case (Tweet by Every Doctor Chief Executive).

Whatever the rights or wrongs of cost-capping, and I am in favour of fixed recoverable costs for absolutely everything, the reality is that a cost-capping order in favour of a party acting against a government department simply means that any costs over and above that sum are borne by the taxpayer.

In that sense the claimants in the cost-capping case against the government are being provided with Legal Aid, in the sense that the taxpayer is to relieve the claimants of part of their costs by ability.

That may be right, and it may be wrong, but given that Legal Aid has been all up abolished in civil proceedings, it is highly questionable that this is the best method of determining government expenditure in relation to civil proceedings.

Crowd funding itself is a highly debatable issue. Let us be blunt – Crowd funding for a person charged with a serious criminal offence is unlikely ever to capture the public imagination, and nor is the case of a person appealing against refusal of their social security benefits or whatever.

To put it bluntly again, Crowd funding is attractive to middle-class people. I have nothing against that group, but if the effect of a Crowd-funded claim getting off the ground, and achieving a cost-capping order, is that less pocket money is available for the Civil Justice system generally and I question its worth and value.

“Not for profit” is also a term capable for the many nuances.

I am not for one second suggesting that anyone at Good Law Project or Every Doctor is paid one penny piece – I simply do not know – and it may well be that everyone in both organisations gives all their time free of charge.

However, that is certainly not the case with all “not for profit” organisations.

Many law firms, and many barristers, are struggling and making very little profit, and indeed many barristers are paid below the national minimum wage, even when being paid, or perhaps especially when being paid, Legal Aid rates by the state.

Yet, they are not for profit.

However, an offer profit company paying its Chief Executive £50,000, or whatever, but making no profit, can properly be described as “not for profit”.

I repeat that I am not suggesting for one minute that that was the case with these organisations, I am simply questioning the assumption of Crowd funding, cost-capping and not for profit are good things.


There may be, or there may not be, but the whole picture is more nuanced than generally reported.

Written by kerryunderwood

March 19, 2021 at 2:17 pm

Posted in Uncategorized

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