Not that long ago, if you’d said that people or businesses could raise money by asking some strangers on the internet you would likely have been met with incredulous looks. Yet crowdfunding is a massive area of growth and alternative forms of finance are threatening traditional banking in ways that one once would have thought impossible. Emily Mackay, CEO of data intelligence firm Crowdsurfer, tells Lawyer Monthly all about crowdfunding and how it could potentially contribute to increased access to justice.
The UK crowdfunding market is currently more buoyant in 2017 than any time previously. According to our own data analysis, the average raised, across all attempts that ended within 2016 was £10,858. The same measure for those that ended before 27th April 2017 is £20,734. Remarkable growth, particularly amidst so much societal, financial and political uncertainty.
So the power of the crowd is clear to see, and it’s no surprise that other sectors have realised its potential. One of these sectors is the law, and one of the leading proponents of this is CrowdJustice. But how successful can crowdfunding for legal services be? Will it improve access to justice or does it still depend on who has the ways and means to effectively raise money?
Gaining access to justice
Access to justice is a cornerstone of democracy, enshrined in the Universal Declaration of Human Rights. But for some in the UK – those that lack the ability to pay for it - this access is under threat. In 2013 the then coalition Government slashed the budget for legal aid by £350m a year. This meant that certain types of case – such as divorce, child contact, welfare benefits, employment, clinical negligence, and most housing law – were no longer eligible for public funds.
A recent Ministry of Justice (MoJ) consultation revealed plans for further cuts. During 2015/16 a total £341m was paid out under the litigator graduated fee scheme, but the MoJ plans to cut expenditure to around £292m, a return to 2013/14 levels.
When you also factor in 2016’s increase in civil court fees – a hike of 620%, one of the biggest increases ever – the picture becomes clear that justice can depend on your ability to pay for it. At the time of the hike, the lord chief justice, Lord Thomas stated, ‘justice has become increasingly unaffordable to most’.
CrowdJustice – putting power back in the hands of the people
To overcome this problem, CrowdJustice was founded in 2015 by lawyer Julia Stalisky, with the intention of making the law available to everyone. Following success in the UK – famously with campaigns focused upon the Chilcot Enquiry and Brexit – the platform has also launched in the US earlier in 2017.
CrowdJustice is simple in how it operates. Once you have a lawyer, you submit your case to the CrowdJustice site. If your submission is successful, you are then invited to build a page to attract donations. When you reach your target, funds transfer to your lawyer.
If a case does not reach its target, then donors’ credit cards are not charged. And if a funded claimant doesn’t use all of the money donated, anyone who has donated more than £1,000 can request a refund. If not, any surplus goes to charity.
A CrowdJustice campaign is very similar to any crowdfunding campaign. This isn’t a surprise when you consider both crowdfunding for business and for justice have the same intention: to fix society’s inefficiencies by democratising access to capital.
Does justice depend on the campaign brand?
But do good intentions mean that justice can become fairer? Crowdfunding undoubtedly increases access to finance, but to an extent it does depend on the power and reach of a brand. When seeking to attract investment, a business must promote its to potential investors and outline why such individuals should support their venture.
Although the CrowdJustice model is seeking donations and not investment, the principle remains the same. So if someone in dire need of legal services cannot put together a campaign to successfully attract donors, in terms of either having those skills themselves or the ability to pay someone to run the campaign for them, will they remain in need of justice?
Furthermore, due to the unglamorous nature of many litigation claims, there may be a large number of failed campaigns, with cases that don’t capture the public imagination remaining un-funded. Are these campaigns any less noble or necessary just because they aren’t remarkable or sexy? Of course not. But the democratic crowd – who vote with their wallets – might deem many worthy campaigns ‘unworthy’ of requiring help.
But CrowdJustice is only two years old and has achieved a number of notable successes in that time, bringing justice to those that otherwise would have struggled to find it. It deserves more time to test and iterate. At this stage it is not perfect, but the fact it exists is remarkable for the people it is already beginning to help.
Crowdfunding has developed in a myriad of ways in the past decade, but its biggest influence could be in providing legal services for those that need it most. Crowdfunding for justice is important, tangible, and, by handing the power back to the people, potentially revolutionary.
