Litigation Funding and Insurance Options

Our costs are funded from your own resources be that income, savings or borrowings. Costs are billed on a time spent basis at the lawyer’s hourly rate. Disbursements and expenses, including court, barrister’s and expert’s fees, are paid on an ongoing basis.

As with all litigation we will give you an estimate for each stage in accordance with the court’s requirements. In some cases, we may be prepared to provide you with fixed fees for each stage of your case.

Deferred Payment Plan

In some types of litigation, we may be prepared to agree to defer payment until a time when certain proceeds are realised, or the matter is concluded. This type of funding option can be particularly useful for contentious trust and probate cases where money is tied up in the deceased’s estate.

These arrangements operate to transfer all or part of the risk for a client’s own legal costs from the client to the solicitor. They can be structured in a variety of different ways.

They are available to all litigants, whether claimant or defendant, irrespective of means, including companies. They are available for English court litigation, English seated arbitration and any sort of proceedings used for resolving disputes (and not just proceedings in a court), whether commenced or contemplated.

The key advantage is the fact that they can assist in reducing costs in an unsuccessful case. However, the additional cost of the success fee and the front loading of costs may deter use.

We are willing to offer “no win no fee” type funding arrangements such as conditional fee agreements and damages based agreements on a case-by-case basis:

Conditional fee arrangements (CFA) – often referred to as “no win no fee”

You will not pay our costs as the claim progresses (but you will need to pay disbursements/expenses). If you win, we will be entitled to charge a success fee on top of our normal hourly rate. Although usually your opponent will be ordered to pay all or some of your costs the success fee will be paid out of any damages awarded in the case. They are not recoverable from your opponent (unless the case falls within one of certain exceptions (which includes insolvency-related proceedings)).  If you lose your case, we will make no charge in respect of our costs, but you will have to pay your own disbursements and your opponent’s legal costs, but you may be able to obtain insurance to protect against this risk (see below):

Discounted conditional fees arrangements

This type of arrangement is a hybrid between private funding and CFAs. A discounted element of our hourly rate (e.g. 50%) will be charged in accordance with our usual terms of engagement i.e. on an ongoing basis, and the balance, the conditional fees will be subject to a CFA and only become payable together with the success fee if you “win” the case. This is becoming an increasingly popular arrangement; not least because it requires that there is a sharing of the risk between you and us.

Contingency fees/damage-based agreements

If you are successful, you will be charged a percentage of the amount recovered as agreed at the outset (not more than 50%). You will not be charged our costs if you lose the case.

Before we are prepared to offer any risk sharing arrangement with you:

• We will carry out a risk assessment first which will often include seeking an opinion from a barrister for which you will be charged in accordance with our terms of engagement
• Although there are many considerations we will take into account, in general, we will need to be satisfied, that the prospects of success are at least 60% or better
• The definition of success or a “Win” in relation to your case will be agreed and clearly be set out
• We will also be entitled to carry out further risk assessments during the course of the matter and, if any issues arise which affect the prospects of success, we will review whether we are prepared to continue to carry on with the arrangement in place.

It may be possible to obtain funding from an independent third-party lender for some or all of the costs and/or disbursements/expenses on a non-recourse basis.

If you win the third-party funder will make a charge for their lending, which is paid out of the damages recovered and is usually calculated as a percentage of the funding and/or award (eg 30% to 40% of your award OR 2-3 times the amount lent OR a combination based on the amount of damages recovered). You will have obligations to the funder as to how you conduct your case. If you lose you will not have to repay the funding.

Third party funding may seem expensive and is most suitable when you do not have sufficient resources to bring the claim and where you are unable to fund court fees and counsel and experts’ fees. The advantage is that it allows you to pursue substantial claims where a partial recovery is preferable to no recovery, or you wish the costs to be off your P&L.

BTE is a policy which covers you in the event a dispute arises which provides cover for legal expenses. This can be a policy you took out covering just legal expenses. More usually it will be a standard home or motor or travel insurance policy with legal expenses cover included, be offered as a benefit by a bank or credit card provider or be available under a policy of insurance maintained by an employer or trade union.  We also regularly act for clients with directors and officers (D&O) liability insurance cover.

It is often the case that such policies limit:-

• what is covered; and,
• your freedom of choice of lawyer
• the amount of costs
• how you conduct your case.

We recommend that you look at any insurance policies which you have in place to check whether or not legal expenses insurance is included.  It may be that such cover will take you some distance in your claim.

We are happy to look at insurance policies on your behalf in order to assist in determining whether you might have appropriate cover.

Indeed, if in doubt, we strongly recommend that you let us have a copy of the policy.

There are crowdfunding platforms that enables individuals, groups and communities to come together to fund legal action. If you think your case may have sufficient public support/interest, this may be a way by which you can raise funds and thereby fund your case.

Insurance policies can be taken out to provide protection against the possibility of you having to pay the total costs of litigation in the event that you lose a case after a dispute has arisen (“after the event insurance” or ATE cover).

ATE cover is usually only provided by an insurer where they are satisfied that the prospects of success of the claim, are at least 65%. The premium depends on a number of factors, most importantly, an estimate of the legal costs that the other side will incur in pursuing or defending the claim and the insurer’s assessment of the risks and likelihood of the claim succeeding.

Insurance cover can be purchased in respect of your opponent’s legal costs, your own disbursements (including court fees, counsels’ fees and experts’ fees) and also your own legal costs.

In considering this type of cover, it is imperative that you ascertain how you will be able to fund the premium. There are four main types of premium:

• One-off premiums – The premium is payable up-front and does not cater for the fact that the case may settle early. If an early settlement were reached, the premium already paid could potentially have been greater than any costs liability to the other side.
• Staged premiums – The premium is payable in stages as the matter progresses and so remains proportionate to the costs incurred.
• Deferred premiums – The premium is only payable at the conclusion of the case, which has obvious cash flow advantages.
• Contingent premiums – The premium is only payable if the case is won, the idea being that it will be payable out of your damages. If the case is lost, the premium is not payable. However, the cost of the premium will be high because the policy is self-insuring and there are in effect two premiums.

Insurers may offer a combination of the above.

Unless the case falls within one of certain exceptions (which includes insolvency-related proceedings) the premium will not be recoverable from the other side, even if you win.

It is almost invariably a requirement that, as part of completing the proposal form, a copy of Counsel’s written opinion on the merits of the case is provided. We will engage insurance brokers to obtain the best/most suitable products for you. This work will have to be obtained and paid for in accordance with our terms of engagement.