Litigation funding

Options available to you to fund your litigation

There are various ways in which a client may pay its own lawyers' fees and expenses incurred during the resolution of a civil dispute – not all are suitable or available for all clients or disputes.

  • Private: the client pays from its own resources the lawyers' fees and expenses as and when billed on an ongoing basis.
  • Legal aid: state funding available to individuals who meet the merits and means tests in only a very limited range of civil claims and only through designated law firms. Withers is not a designated firm for civil legal aid.
  • Before-the-event 'BTE' insurance: a pre-existing policy held by the client that provides for a fixed level of cover for lawyers' fees and expenses for certain types of dispute. Often sold as an adjunct to household or other general insurance. Existing policies must be checked before other forms of funding are used.
  • Conditional fee agreement 'CFA': the lawyer agrees to charge lower, or no, fees on an ongoing basis in return for an uplift in fees (to a maximum of 100%) if the dispute is resolved successfully. Expenses normally have to be paid throughout and an initial assessment paid for at the outset.
  • Damages-based agreement 'DBA': the lawyer receives a share of the damages or compensation recovered as their fee. Expenses normally have to be paid throughout the case. The lawyer's share is capped at 35% of recovery for employment tribunal claims, and 50% for other commercial claims.
  • Commercial litigation funding: a commercial investor pays the lawyers' fees and expenses on an ongoing, non-recourse basis in return for a share in the damages or compensation awarded to the client. Generally only available for claims well in excess of £100,000.

Adverse costs orders: in court or arbitral proceedings in England and Wales the losing party is usually ordered to pay a substantial proportion of the successful party's legal fees and expenses. Adverse costs orders are not the norm in employment tribunal cases, but can be made in limited circumstances. Protection against such an adverse costs order should be considered at the outset.

Commercial litigation funding agreements and BTE policies may provide cover for adverse costs orders, or a specific insurance policy can be purchased, after-the-event ('ATE') insurance, to provide a fixed level of cover for adverse costs. The cost of an ATE policy depends on the level of risk as assessed by the insurer, and the premium may be deferred, staged or conditional on success.

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