Funding Litigation in the UK
Whether you are having a problem with a commercial contract, a negligent professional or a business partner, the cost of litigation needn't prevent you from enforcing your rights. It's possible to fund commercial litigation in the UK in an affordable and economically viable way.
Litigation Financing
Conditional fee agreements allow individuals or businesses to make a legally binding arrangement with a solicitor that some or all of the fees involved in making a claim will only be paid if it is successful. Claims brought on such a no-win, no-fee or no-win, low-fee basis are an important part in litigation financing and allow people access to justice without the risk of prohibitive costs.
The main advantages of entering into a conditional fee agreement are that the client and solicitor share the risk as well as the costs of a commercial claim. If the case is unsuccessful, a client will only have to pay a small amount, if any, of a solicitors' fees and for disbursements and expenses.
Advantage Litigation Services are experts in the funding options available for commercial claims and litigation. We help our clients avoid up-front costs and reduce the financial risks associated with taking legal action.
Litigation Funding Options
No-Win No-Fee (Conditional Fee Agreements)
A no win, no fee arrangement, also known as a conditional fee agreement, can be used in all forms of civil litigation, including commercial disputes. It is an agreement between a solicitor and client whereby a client will only pay the solicitors' fees, and an additional success fee, if the case is successful. When the case is successful, the solicitor's fees are usually recoverable from the losing party. If the case is unsuccessful, the client will not pay any of the solicitors' fees nor a success fee.
The success fee is separate to the basic fees normally charged and provides the incentive for a solicitor to take the case. In commercial disputes, the success fee is a percentage of what the fees would have totalled, based on basic charges, had the funding arrangement not applied. When a solicitor is negotiating a no win, no fee arrangement and the level of success fee (which cannot amount to any more than 100% of the basic charges), they will take into account the likelihood of winning the claim, the potential to settle and the costs that might be incurred.
In most cases, conditional fee agreements only apply to solicitor fees. Whether the case is successful or unsuccessful, all disbursements (such as court fees, counsel fees, expert fees and travel expenses) will still be payable by the client.
Although the client is liable for any solicitor fees, a success fee and disbursements if their claim is successful, it is possible to seek payment of some of those costs from their opponent. Should the opponent be successful, the client will be liable for the opponent's costs. However, insurance is available to cover the costs of a successful opponent. Advantage Litigation Services can help you find the necessary insurance cover to ensure legal costs and any potentially liabilities are affordable.
The precise terms of a no win, no fee arrangement, such as the meaning of success and the success criteria, are specific to the circumstances of the commercial claim being pursued. Contact us today to see whether you have a commercial claim and a solicitor will work on your behalf under a no win, no fee agreement.
No-Win Low-Fee (Partial Conditional Fee Agreements)
A no win, low fee arrangement, known as a partial conditional fee agreement, can also be used in all forms of civil litigation. Under this type of agreement, a client will pay the solicitor's fees at a reduced rate throughout the course of the claim. If the case is successful, the client will also pay a success fee. When the case is successful, the solicitor's fees already paid are usually recoverable from the losing party. If the case is unsuccessful, the client will pay the solicitor's fees at a reduced rate only.
As with full conditional fee agreements, the success fee is the incentive for a solicitor to take the case. It is a percentage of what the fees would have totalled, based on basic charges and not exceeding 100%, had the funding arrangement not applied. It is also the case that partial conditional fee agreements only apply to solicitor fees. Whether the case is successful or unsuccessful, all disbursements (such as court fees, counsel fees, expert fees and travel expenses) will still be payable by the client.
Although the client is liable for any fees and disbursements if their claim is successful, it is possible to seek payment of some or all of those costs from their opponent. Should the opponent be successful, the client will be liable for the opponent's costs. However, insurance is available to cover the costs of a successful opponent.
The precise terms of a no win, low fee arrangement, such as the success criteria and the reduction that will made to the fees normally payable, are agreed on a case-by-case basis. Contact us today to see what litigation funding options may help you make a claim without putting your personal finances at risk.
Third-Party Funding
Third-party funding is where a private commercial litigation funder, with no interest in the claim, agrees with a person or business to pay for all or some of the costs involved in litigation under a litigation funding agreement. If the claim is successful, any monetary award made will be shared with the person or business who pursued the claim and the funder that paid for it. If the claim is unsuccessful, the funder cannot reclaim any of the money it has spent and the losing party isn't liable for any of the costs.
In most cases, third-party funding will only be available for commercial claims that have a very high value and strong chance of success. This is so the litigation funder isn't taking on too much risk when paying for legal action it has no direct involvement in. It will usually also be a requirement for the person making the claim to have insurance protecting themselves, and therefore the funder, from paying any of an opponent's costs should the claim fail.
The amount a litigation funder will take in the event that a claim is successful will be decided when the terms of a litigation funding agreement are being negotiated. In most cases, the amount will either be a percentage of any damages recovered, a multiple of the total amount paid by the funder or a combination of the two.
Although third-party funding means sacrificing part of a financial award if the claim is successful, it allows an individual or business with a good and strong claim to take legal action without any risk to their personal finances.
Hourly Rate
The most common way of funding litigation is by paying a solicitor an hourly rate for the work they do in relation to a claim. Costs and fees are payable throughout the course of a claim when litigation is funded in this way.
Individuals or businesses with goods claims needn't be discouraged from getting the justice they rightfully deserve if their solicitor charges for legal services at an hourly rate. It may be possible to negotiate the rate payable to reflect the particular circumstances of the client and their claim. It may also be possible to get insurance protecting against the risk of being liable for an opponent's costs should the claim fail.
Whether you're an individual or a business, enforcing your rights in a civil court needn't be a costly way of resolving a legal problem. At Advantage Litigation Services we have the expertise to help you find the most cost-effective way of solving your particular commercial dispute.
Talk To Us About Funding Litigation
If you are thinking about taking legal action against another individual or company but are confused about your funding options, Advantage Litigation Services can advise. We can help you find the most cost effective solution for your circumstances. Click here to contact us today or call 0800 160 1298 to see how we can help you
