Address

Offices: 

Hull
London
Leeds

0845 6808 251

Address

Offices: 

Hull
London
Leeds

Funding the Cost of Litigation

One of the major issues facing both individuals and businesses who are involved in a dispute is how the litigation will be funded.

There are a number of options available and at Hallmark, we examine all of them in order to find the best funding solution for the client.

There are a number of different options available

Private fee paying

Historically, this is the way that most cases have been funded. In this case, the client pays their solicitor’s charges whether they win the case or not. Charges are usually calculated on either an hourly rate basis or on a fixed fee basis for different parts of the case and the client is usually billed on a monthly basis. 

Public Funding

Please note that this firm does not act under the public funding system. If you are looking for a firm that will act under a public funding arrangement then please contact the Legal Services Commission (www.legalservices.co.uk)

Conditional Fee Agreements (also known as “No Win, No Fee” Agreements)

Conditional Fee Agreements (CFA's) are an increasingly popular area of litigation funding.

In this scenario, you do not pay your solicitors fees unless your solicitor wins the case, in which case your solicitor would reasonably expect to recover their legal fees from your opponent.

There are limitations, however. Your solicitor must be satisfied that you have a reasonable chance of success and CFAs are generally only suitable for money claims. A CFA is generally not a suitable option if you are a Defendant in a case, or the claim being made for a non-monetary remedy. 

Damages Based Agreements (also known as DBAs)

DBAs have only existed since 2013 when a change in the law allowed solicitors to act for a client and take a percentage of any damages awarded to that client as their fee.

In this scenario, the solicitor’s charges are limited to the amount recovered for the client. Any costs recovered from the Defendant will reduce the amount payable out of the damages.

As with CFAs (above), your solicitor must be satisfied that you have a reasonable chance of success and CFAs are generally only suitable for money claims. A DBA is generally not a suitable option if you are a Defendant in a case, or the claim being made for a non-monetary remedy.

Legal Expenses Insurance

Many people do not know that they have Legal Expenses Insurance which can often be attached to either your motor insurance policy or your home building & contents insurance policy. Further, businesses often have legal expenses cover and directors & officers cover as part of policies of insurance they take out.

This is known as “Before the Event” legal expenses insurance cover.

We always advise clients to check their policies of insurance in order to ascertain whether or not they have appropriate legal expenses insurance cover and advise them on how best to deal with this.

It is also possible to obtain what is known as “After the Event” legal expenses insurance cover. This kind of cover is arranged after the dispute has taken place. In this situation, the insurers will carry out a detailed analysis of the case, and if they are satisfied, then they will sell you a policy of insurance that will cover both your own solicitor’s costs and the costs of your opponent if you lose the case. The cost of the premium for After the Event cover can be very high, often up to 25% of the amount of cover required (for example a £25,000 premium for £100,000 of cover).

It is important to note that After the Event insurance is also used as a defensive measure to protect you from having to pay your opponent’s legal costs if you lose. We will advise you about the availability of After the Event insurance as a protective measure. 

Third Party Funding

There are professional litigation funding organisations that will “invest” in cases. They will usually demand a percentage of any damages received by you, however, in return they will fund your solicitors fees and other related costs (such as court fees and expert witness fees) up to a given financial limit. The percentage of damages required by the litigation is subject to negotiation on each individual case, but can often be high with a higher percentage demanded for higher risk cases.

Telephone us on 08456 808 251 to discuss the funding options available to you.

Download our Free Brochure on Litigation Funding

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Hallmark Legal Services Ltd. Chandlers Court, 158/159 High Street, Hull, HU1 1NQ.