Funding litigation - professional negligence claims
included - can be expensive and a commercial risk. If
you win you should normally recover all or part of your legal costs
from your opponent, but if you lose you will normally be required
to pay a percentage of your opponent's costs as well as your
own.
As well as helping you manage the risk of
litigation through case analysis, project management and budgeting,
there are a number of different options to fund
litigation. Each option must be considered in light of the
facts of the dispute.
In addition to a standard retainer (whereby
you pay for your legal fees and disbursements following the
submission by us of an invoice on a regular basis), the following
funding options can be considered.
before the event insurance (BTE)
- You may have legal expenses cover. This may, for instance, be
available to you under your household insurance policy or motoring
policy, or ancillary to warranty indemnity insurance or business
interruption cover. The purpose of BTE cover is to meet the
legal costs incurred by the insured in future legal disputes
- If you think you have any such policy, please let us see
details of it. Cover may be limited or subject to
restrictions.
after the event insurance (ATE)
- ATE is issued after the dispute arises and it is designed to
protect against your liability to pay your opponent's legal costs
along with a proportion of your own disbursements in the event that
you are unsuccessful in your claim.
- We have delegated authority to issue ATE policies for a leading
insurer for certain types of cases. Alternatively we can put
you in touch with a broker who specialises in ATE, or you can
consult with your own broker. Under our delegated authority
scheme the premium is calculated as a percentage of the costs
incurred at the date your claim is successfully concluded by
negotiation or court proceedings. Payment of the premium can be
deferred until the conclusion of the action and is only payable if
you succeed in your case.
- The insurance premium is generally recoverable from your
opponent if you win and are entitled to recover your costs from
your opponent. If settlement includes costs, the premium will
be payable from the settlement proceeds.
- An insured party has a continuing duty to disclose all material
facts to the insurer, not just on the proposal form but also as the
action proceeds. It will also be necessary for us to report to
the insurer on a regular basis and have regard to their interests
in the case.
risk sharing with the lawyer – Conditional Fee Agreement
(CFA)
- Under a CFA we can charge a reduced fee or occasionally no fee
if the case is unsuccessful and a 'success fee' on top of the
normal fees if the case is successful. Generally the success
fee is recoverable from your opponent if you win your case.
- We would need to carry out a risk assessment of your case to
decide whether we are able to offer you a CFA and if so, upon what
terms. An assessment fee will be payable, the size of which
will depend upon the nature and complexity of the matter.
- You may wish to take out ATE insurance in conjunction with a
CFA to insure against the risk of liability for your opponent's
costs and possibly some of your disbursements in the event that you
lose your claim.
- For businesses with commercial claims within a certain criteria
and within a value of at least £25,000 we can offer our own product
IN-Focus,
which offers cost protection for commercial litigation through the
use of a part-funded CFA backed by an insurance
policy. Click here for more details about
IN-Focus and we will be pleased to discuss this with you.
funding from third parties
- There are specialist companies which invest in litigation in
return for a substantial share (usually up to 50%) of the
damages. The cases in which they invest are of a certain size,
where the prospects of success are high and where the opponent's
ability to pay is good. The third party funders will require
an element of control of the case. The funding will generally
cover all or part of your costs, any ATE premium and any costs you
are required to pay your opponent.
