Crowd-funding is frequently used as a way of funding claims: the UK’s main legal crowd-funding platform, CrowdJustice, is currently hosting over 1,500 live campaigns, with widely varying levels of support.
Crowd-funding can be a powerful way of righting a wrong which, because of the high cost of litigation, would otherwise go un-righted. It has contributed to “gender wars” cases on a number of occasions already: Keira Bell, Maya Forstater, Henry Miller, Julie Bindel, For Women Scotland, Fair Play For Women, LGB Alliance, Jo Phoenix and Lizzy Pitt have all used it to good effect, to mention just a few. These cases have been funded, for the most part, by large numbers of small donations. Many of them have been successful.
But there are worries and uncertainties about this method of funding litigation. Any member of the public can decide whether a particular grievance tugs hard enough on their heartstrings to persuade them to contribute. But they won’t necessarily have very good information about how likely a given case is to succeed, or whether it is being run in a sensible, cost-effective or prudent manner. Sometimes donors have undoubtedly been persuaded to waste their money to the benefit of no-one but lawyers.
The key to good crowd-funding is information, and transparency. We want to suggest some rules of thumb.
On launching
At the outset, we think a crowdfunder should address the following questions:
What are the outline facts of the case?
Tell the story in a paragraph or two. What has happened?
What is the cause of action?
That is to say, what kind of legal claim is proposed? A breach of contract claim? Judicial review of the decision-making of a public or quasi-public body? Discrimination contrary to the Equality Act? Negligence?
How strong is the case?
A short advice by a named lawyer on how likely the case is to succeed should be published as soon as possible, together with (or followed by, if not yet drafted) the statements of case on both sides.
It may be objected to this that a candid assessment of merits “gives too much away”. We don’t think this is a serious concern. Even if courts or tribunals were to read these assessments (which we think unlikely), they will make up their own minds on the merits of the case.
More fundamentally, if you don’t think the case has good merits, then unless there’s some exceptional justification — which you should be willing to explain — you shouldn’t be asking the crowd to pay for it. We don’t suggest that it will always be desirable to give as granular an assessment of the strengths and weaknessess of each aspect of the case as might be provided confidentially to the client; but it should be possible at least to say in the round how good the chances are of a substantial and worthwhile measure of success.
Does the outcome of the case matter to anyone but the individual claimant, and if so why?
It’s perfectly open to individual donors to support a case just because they feel the claimant has suffered an injustice, and they want to help. But donors should be given the information on which to make an assessment of the wider importance of the case.
If the case is of strategic importance, what is the individual claimant’s attitude to settlement?
Claimants won’t be able to give cast-iron guarantees that they will not settle in any circumstances, but a statement of intent not to settle the case confidentially in a manner that benefits only him or her, anyway unless advised it’s essential to do so, may give contributors some comfort.
What are the best case and worst case outcomes?
Who are the lawyers, and what’s their expertise and track record?
What total costs are anticipated? What factors could push those up? What work will be covered by the initial target?
The answer to the third question may give an indication of whether the case is being prudently managed: it should not normally cost more than a few thousand to get an initial advice on merits and draft the claim. If for some reason the case is going to be particularly expensive to run, that should be explained at the outset.
Is there a risk of having to pay the other side’s legal costs? What’s the plan for that?
What will be done with any excess left in the fund after all legal fees are paid?
Running the case
Once the case is launched, it should be run with maximum transparency throughout. There should be prompt publication of any case documents that it is possible to publish, and lawyers should take all reasonable steps to facilitate public attendance at in-person or remote hearings, access to witness statements, documents referred to in court, reporting, live-tweeting etc.
Legal fees
Legal representation is expensive, and that’s unavoidable: if crowd-funded cases are to be competently done, the lawyers will need to be able to earn from them at levels not too far from their usual rates. But lawyers’ “usual rates” often encompass quite a wide variation depending on the means of the client. When billing on a crowd-funded case, lawyers should remember that they are being paid from large numbers of small donations from donors of modest means. It doesn’t seem fair to treat “the crowd” as a client with a particularly deep pocket.
The result
The outcome of the case should be announced promptly with transparency, honesty and completeness; it should never be “spun” as more successful than it was.