Client hardship applications: Regulation 16(3)(a)

The regulation states:

16 (3) The Board may authorise that the requirement created by section 12 (3) (c) of the Act that, before recourse to the Fund, fees or outlays shall be paid to the solicitor out of any property which is recovered or preserved for the client shall not apply in relation to the whole or any part of any such property in any case where an application by the solicitor the Board are satisfied that –

(a) payment out of the property to which the requirement would otherwise apply would cause grave hardship or distress to the client;

You should make this application if paying the costs of the case from the property recovered or preserved would cause the applicant grave hardship or distress.

To make an application under Regulation 16 (3) (a), you should use the online form through Legal Aid Online.

Please see – How to submit a hardship application (video) Note: LAOL notifications page has changed since the video was made but completing the form remains the same.

Although applications made under Regulation 16 (3) are commonly referred to as “hardship applications”, applications under Regulation 16 (3) (a) require to demonstrate grave hardship or distress.

We are not aware of any formal legal definition of “grave” in such a context and so believe it reasonable to apply the ordinary meaning of the word which we take from standard dictionary definitions to be “serious, important or crucial”; and the ordinary meaning of the word “distress” to be “extreme unhappiness or worry, upset badly or in dire need of help”.

In other words, the standard to be met is extremely high and not met by inconvenience or disappointment.

We will look at each hardship application on its own merits and consider the impact on the applicant of paying your fee and outlays.

For applications based on grave hardship, you must provide details and supporting documents showing:

• why the recovered sums should not be used to pay your account, and
• why it would cause your client ‘grave’ hardship.

Please note that being in receipt of state benefits is not indicative by itself of grave hardship. If your client was and continues to be on benefits before and over the course of the action, this will not be considered as grave hardship.

If there is evidence that the applicant has deliberately disposed of property or, for instance, left employment in order to avoid paying, we may refuse the application.

Specific financial evidence you should supply us with

Applicants should give us details of all income, outgoings and any capital they hold, including any partner’s resources.

This should enable us to assess the impact on them paying your fees and outlays and whether they are likely to suffer any grave hardship.

We will take into account housing costs such as mortgage, rent, council tax, gas and electricity, food, essential travel, and clothing.

Our consideration of your client’s outstanding debts

When assessing your application, we will consider debts. For example, arrears for rent, mortgage, utilities, and council tax which have accrued as a direct result of the action in which advice and assistance was granted.

We may consider non secured debts but payment of your account takes priority.

When an application is submitted you must state the desired use for the property your client has recovered or preserved and provide evidence of the costs involved.

Examples of essential costs that may be considered are:

• Costs of repairs relating to the action (for example, damage caused by flooding)
• Re-fitting a home to accommodate a disability caused by the accident/assault
• Purchasing essential items for a home after a separation where the applicant has to ‘start again’
• A loan for an essential item – such as a loan to purchase a motor vehicle

Example 1: If the applicant is a lone parent, living in an isolated rural area and a motor vehicle is vital to travel to shops, schools or medical practitioner, the application is likely to be granted.

Example 2: If the applicant’s home was flooded and flooring damaged, redecoration is needed. We would consider allowing the client sufficient funds from any award made to fix the flooring and redecorate the damaged area. Quotes and/or receipts must be sent with the application.

Example 3:  Following an employment matter the client wishes to repay a debt for Council tax.  The debt is for 10 months of unpaid council tax.  For seven months of this time the client was in employment, but for three months they were unemployed and the funds now awarded to the client are to compensate them for the period they were unemployed.  We will allow the client to use sufficient funds from the award made to cover the 3 months of arrears that the client was in unemployed, but not the 7 months in which they were working.

Examples of non essential costs that will not be considered are:

• An applicant intending to take a holiday following a serious assault or while their home is being decorated following internal damage (unless they provide medical evidence that this is necessary).
• An applicant has received compensation for damage to a property but they intend to use the funds to allow them to add some new structure, such as a conservatory, to that property.
• Payment of loans for general home improvements, holidays or consolidation of debts
• Gym memberships (unless they provide evidence that this is necessary), membership of clubs, football season tickets, participation in sports and hobbies
• Entertainment including satellite and cable TV
• Private school fees
• Mobile phone charges

Example 1: An applicant receives damages from the council because they had an accident. With the funds received the client wishes to purchase a new television and entertainment system. This would not be considered as an essential cost and the application refused.

Example 2: An applicant receives money from an employment action and wish to use the funds to renew a football season ticket that they could not afford to do previously. This is not considered an essential cost and the application would be refused.

You should consider the impact the sale of the property recovered or preserved will have on the applicant in order for you to obtain payment of your account, including:

• how much they would receive if they were to sell the property and
• its personal importance to them (for example, a family heirloom).

Example 1: Client recovers a television. If this had to be sold to repay the fee, the amount that would be received from the sale of second hand goods may be minimal and may not cover the cost of your account. Client would be left with no TV and no funds to cover the full fee. The application would be considered.

Example 2: Client receives a policy which is not due to mature until a much later date. If the policy is surrendered now to cover fee the client will lose some of the value. This is not considered as grave hardship and the application would be refused.

Information you should provide about potential client distress

Where applicants claim they will suffer distress if they have to make payment of your fee, you should explain in detail the nature of such distress.

Would they have to sell a treasured family heirloom or personal item of a close relative? If applicable, they should provide medical evidence to support the nature of the distress.

The test is one of reasonableness, which we see as being fair, logical and sensible.

We will not make any specific provisions for types of case – for example, money received from the Criminal Injuries Compensation Authority and employment appeal tribunals.