Funding your Case – 4 Ways to Pay

Where there’s a will, there is a way and that way can be with litigation funding!

Litigation funding gives the opportunity for litigants to bring cases to court without having to fund them themselves either because they simply can’t afford to take on the case or, in the case of some businesses they simply don’t want to.

In the United Kingdom this type of legal funding can be loosely divided into four main areas:

Conditional Fee Agreement

We have all heard or seen advertising for solicitors offering “no win no fee” agreements for your claim.  If you take up this kind of offer you will be entering into what is known as a Conditional Fee Agreement.

This agreement is a legally binding agreement between you and your solicitor.  The written agreement will detail the success fee that is to be charged by the solicitor on receipt of your award, this is usually set as a percentage of the damages. There are restrictions on the amount a solicitor can charge as a success fee, these should also be detailed in the agreement.

It is not permitted to use a conditional fee agreement in family law cases, such child custody for example.

These type of agreements are typically used for personal injury claims.

Damages Based Agreement

These agreements are very similar to the conditional fee agreement but historically were used in cases of employment law.  Recent changes to the use of these agreements now allow them to be used in other areas.

Again, this is a legal agreement between you and your solicitor where the solicitor charges a percentage of the damages awarded to pay for their services.

Fixed Fees

For straightforward, low cost cases a solicitor may offer a fixed fee package.  This way you will know exactly what the fees for the case are going to be, either for the full case or for each stage of the proceedings.

Third Party Funding

This kind of funding is provided by a professional funder who pays for either some or all of the costs and expenses that are related to your case.  The funds are provided in return for a portion of the sum awarded if the cast has been successful.  If the case is unsuccessful it is the funder that pays the costs as per their legal agreement.  This kind of funding is generally used for cases that are making claims against large corporations and organisation and where the potential settlement figure is very substantial.

 

Litigation Funding is big business in the United Kingdom and is only set to get bigger, as the Guardian reports,  with large firms from Australia moving into the market.  They are widening the net to include group actions, which enables them to fund multiple claimants in large groups, shareholders against a company for example.  They will particularly focus on consumers, who have little chance of winning a case with an individual complaint, by using a class action where a group of plaintiffs bring the case to court.  A positive move forward consumer, but will a rising number of cases against the retail industry push up our prices in the UK?  What do you think?