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How to pay for litigation

16 April 2015 | Ken McEwan

For a business, litigation can come at just the worst moment. 

The matter raising the need to litigate may be the cause of cash flow issues. You might not have access to the funds you need to pay the legal fees to progress the claim.

Success fees on conditional fee agreements are no longer recoverable from the opposition in the event of a successful claim. Insurance policies are available but the premium is also no longer recoverable from the opposition if the claim is successful.

The fear of the costs of litigation put many people off claiming altogether.
In response to this, the financial services industry has developed a number of products to finance legal fees and insure against the risk of paying the opponents costs in the event of an unsuccessful outcome.

Brokerage services have grown up to investigate the most suitable services on the market.

Litigation Funding Options

Here’s our round up:

  1. Pay as you go. You agree a fee arrangement with your solicitor and he raises a series of interim bills which you pay as they arise. This is the cheapest option as there is no credit element that needs to be financed. Think of it like the difference between buying and renting a TV. The up front payment is bigger if you buy, but ultimately you will pay more if you rent.
  2. Straightforward loans where you repay by instalments and in return pay straightforward interest payments.
  3. There are arrangements whereby the funder agrees to fund the litigation in return for a share of the proceeds and may not be require to be paid unless there is a successful outcome.
  4. Depending on the route you go down the funder may require you to take out after the event insurance. Again there are various products. Some do not require payment until the end of the case. Some contain an element of self insurance so that the premium will only be payable if there is a successful outcome.

If you have a good claim and all that is putting you off is the ability to fund it or the fear of having to pay the opponents cost if you lose, then come and talk to us. There is a product out there for you. Whether it’s a big claim or a smaller one, there will be a way of pursuing it, and we can help you find it.

For more information contact the Dispute Resolution team by emailing or calling 0117 906 9400.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

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