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A Guide to Litigation Funding

A Guide to Litigation Funding


Expert view

The prospect of paying for litigation can be daunting but it doesn’t need to be. We have experience in helping clients bring and defend claims using a variety of funding options. These include arrangements which can reduce or remove the need for you to pay costs upfront.

We believe that before engaging in litigation, you should be absolutely clear about the options you have available to fund your claim and what legal fees and expenses, if any, you will be responsible for as your claim progresses.

Fees

Our fees are charged on an hourly rate and build up according to the amount of time we spend working on your case. The hourly rate applied to your case depends on the seniority of the solicitor handling the claim.

For most people, an hourly rate claim is not that attractive due to the costs involved. As a result, the majority of claims we take on are on a Conditional Fee Agreement, known as a CFA or No Win No Fee Agreement.

Conditional Fee Agreements

A CFA is a common method to fund your claim. CFAs are particularly beneficial because they remove any need to pay our fees upfront.

The agreement you enter into with us says that if your claim is successful, your opponent will pay most of your legal costs once the claim is decided.

If you lose your claim, which is unlikely, the CFA means you won’t have to pay our fees at all. You’ll still have to pay any outstanding disbursements though. You can find more about disbursements in the section below.

There are a number of different CFAs that can be tailored to suit your needs. But because we are taking a risk that our legal fees won’t be paid if you lose, we need to demonstrate that you can prove your claim and that the defendant can pay our costs if your claim succeeds.

Not all claims are suitable for conditional fee agreements. If yours isn’t, we’ll explain why and we’ll be happy to act for you on a fee paying basis, with time charged on an hourly rate.

Disbursements

As well as legal fees, litigation normally involves some additional costs. These are called disbursements. Disbursements include fees such as:

  • Expert Witness Fees 
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  • Although they are not always needed, expert witnesses are instructed to provide evidence for the Court on liability or on the value of your claim. Even though expert witnesses have an overriding duty to the Court, it’s your responsibility to pay their fees.
  • Barrister’s Fees 
  • You may need to instruct a barrister to prepare certain legal documents for you or to appear for you at Court hearings. Barrister’s fees are charged by the hour and the hourly rates vary depending on their seniority and experience. Barrister’s fees are payable as soon as you need to instruct one and payment is your responsibility.
  • Court Fees  
  • If it becomes necessary to issue your claim at Court, you’ll need to pay a Court fee. There could be other Court fees charged at various stages of the claim for applications or hearings. Paying Court fees is your responsibility.
  • Mediator’s fees
  • Mediation is a very successful method of settling disputes. The Courts strongly encourage litigants to arrange in mediation to try to settle any claim before coming to trial. Mediator’s fees will depend on their seniority and experience. These fees are payable by you before mediation begins.

You will be responsible for paying any disbursements that are due throughout your case. If your case succeeds or you reach a negotiated settlement with your opponent, some or all of these expenses can be recovered from them. You may want to take out After the Event (ATE) Insurance policies which will pay for your disbursements throughout the life of your claim. We can help you arrange this.

After the Event (‘ATE’) Insurance Policies

Although it’s very unlikely, if you do lose your claim or if you are ordered to by the Court, you will have to pay a portion of the opponents’ costs. This is called adverse costs.

We have a 98% success rate in professional negligence claims, so our clients rarely pay adverse costs, but to be absolutely protected, you should consider whether you want to arrange an After the Event Insurance policy. These policies can usually be arranged with no upfront cost.

If you do arrange ATE insurance and you have to pay adverse costs, the insurance policy provider will pay these costs for you as long as you have enough cover. Any amount of adverse costs which exceeds the limit of your cover in the policy will be your responsibility to pay.

ATE insurance not only protects you from adverse costs, but it can also meet your own disbursement costs. You are responsible for the payment of the premium for your ATE policy, and they may appear expensive, but you can pay the premium at the end of your claim once you’ve received your damages. If you lose your claim, you won’t need to pay for the policy. As a result, ATE insurance is an effective method to remove some of the financial risks associated with litigation.

Contact Us

We don’t think that you should be stopped from making a worthwhile claim just because you are concerned about how you can fund it. If you’d like to discuss funding a claim with us, please call our Dispute Resolution Team on 0117 926 4121 or make a Free Online Enquiry.