Funding Your Claim

There are a number of ways in which civil litigation can be funded.

Cunningtons will consider with you methods of funding from the outset and aim to provide you with the best option that they are able to. The funding of civil litigation can be complicated, particularly when insurance and conditional fees are involved.

We are always on hand to discuss any issues or queries that you may have.

Legal aid and public funding

It is rare for public funding to be available to someone in civil claims. If you are unsure whether or not your matter is eligible for public funding, you can check on the following website… https://www.gov.uk/check-legal-aid or contact the Civil Legal Advice helpline on 03453 454345.

On an hourly rate basis

The most standard and common form of funding litigation is an agreement to pay on an hourly rate basis. This is straightforward and flexible.

Cunningtons offers competitive and sensible hourly charging rates and will provide you with an estimate of the time that it may take to deal with the various aspects of your matter.

Fixed fees

For some type of work, Cunningtons is able to offer fixed fees. An example of this are our landlord and tenant services, in respect of which Cunningtons offer very competitive rates.

Before the event insurance

It is important that you check your insurance policies to see if you have cover for legal expenses.

You may have bought an insurance policy or taken out a credit card which includes a specific legal expenses policy.

If you do have insurance cover and your insurer agrees to indemnify you, they may tell you that you have to use one of their panel solicitors. You do not necessarily have to agree to this and generally have freedom of choice to decide who you appoint to provide you with legal advice.

We have experience of working with insurers pursuant to policies of insurance and we can normally act on the same basis as they would instruct their panel solicitor.

After the event insurance

After the event insurance can sometimes be obtained to cover your expenses and/or the costs of the other side should you lose your claim.

Whether or not insurance is available and the cost of any insurance premium for such a policy depends on a number of factors but is primarily related to the risk in the claim. The more risky the claim is, the more likely the insurance premium will be higher or the insurer will decline to offer a client a policy.

The use of after the event insurance has diminished in light of changes in the law some years ago, primarily because the insurance premium payable for such insurance cannot now be recovered from the opponent, even if your litigation is successful. This means that the cost of an insurance policy will have to be paid by the client even if the claim is successful. ATE insurance was and sometimes still is used in conjunction with a conditional fee agreement, sometimes referred to as a CFAs and ‘no win, no fee agreements’.

Conditional fee agreement

A CFA can come in several different forms. In short, it is an agreement to charge no fee or a reduced fee in the event that a claim is unsuccessful but if the claim is successful, a full fee or uplift can be charged.

As with ATE insurance, the use of CFAs has diminished following changes in the law. It is now not possible to recover an uplift under a CFA from a losing opponent. This means that the additional fee charged cannot be recovered from the opponent.

Damages based agreement

At the same time as there were changes in the law relating to CFAs and ATE insurance premiums, damages based agreements were introduced.

This is an agreement whereby the solicitor charges a proportion of the damages awarded to the client. The proportion charged depends on the risk in the claim and can be up to 50% of the sum ultimately recovered. In personal injury claims, this figure is up to 25%.

Third party funding

Third party funding can come in a number of forms and may be available for legal costs, disbursements (e.g. the cost of third parties such as court fees and expert fees) and/or barrister’s fees.

There are commercial funders available for most types of litigation, depending on the value of the claim and the prospect of recovering their costs from the opponent. The funding may take the form of a loan, in respect of which interest is payable. It may also take the form of an advancement with a fixed fee payable.

Trade union funding

A client may be a member of a trade union which provides legal advice and assistance to its members, either directly or via an indemnity for your legal costs.

If you are a member of a trade union it is worth checking with them whether or not you are covered for legal advice. This is normally restricted to advice and assistance in respect of employment law.

Crowdfunding

A relatively new phenomenon is crowdfunding, where third parties agree to donate sums to a litigant to fight a claim. There is little law on this particular method of funding at this stage and it is unlikely to be something that a client has available to them.

Disclaimer

The information contained on this page does not constitute legal advice and is for guidance purposes only.

Every case is different and the funding options that are available to a client depends entirely on the facts of the claim and surrounding circumstances. Cunningtons are not obliged to offer services on any particular basis and reserves the full right to decline instructions if the basis of funding cannot be agreed.

FURTHER INFORMATION