Litigation and Disputes Funding Options
At Rogers & Norton, we understand the problems that clients potentially face when faced with the prospect of engaging in litigation in order to secure or protect their rights. Traditional funding arrangements require clients to pay fees on an ongoing basis. This can expose the client to the risk of substantial costs and those projected costs can make litigation appear to be an unaffordable luxury regardless of the strength and value of a claim.
- Conditional Fee Agreements
- Tailor made arrangements
- Insuring against the other party's costs
- The Impact on the Litigation.
- Risk sharing and working together.
Conditional Fee Agreements (CFAs).
Often referred to as "no win- no fee" agreements, these have been for some time been the norm for personal injury cases. They can equally be used, however, in commercial disputes, in particular those involving substantial money claims.
Under a CFA, we will take the risk that if your claim is unsuccessful, then we shall not raise any invoice to cover our fees. However, this risk is balanced by the fact that if your claim is successful, we are entitled to be paid a "success fee". This means that we are paid at up to twice our normal rate if the case is won. Under new rules, we cannot recover the success
fee from the losing party.
This "swings and roundabouts" approach to litigation funding effectively allows us to "gamble" on cases being successful and enables clients to pursue claims which might otherwise be unaffordable.
If we believe that your case may be suitable for a CFA, we shall carry out a risk assessment on your case to assess its merits and the likelihood of recovery at the end of the case. We are happy to consider acting on a CFA where we believe that the case has good prospects of success and we are likely to make a recovery on your behalf at the end of the case.
Tailor made arrangements.
If we are not prepared to act under a full blown CFA, we may still be prepared to represent you on a discounted fee CFA (or "no win - less fee"). In that case, we would agree to act at a reduced rate (which is payable in any event) but with a more modest success fee mark up if the claim succeeds. As with standard CFAs, our fees including that success fee are recoverable from the unsuccessful Defendant.
Insuring against the other party's costs.
Any CFA only covers the client's own legal fees. It does not offer any protection against liability for your opponent's fees in the event that your claim is unsuccessful. The general rule in UK proceedings is that the loser pays the winner's costs and the threat of this can again deter people from pursuing potential claims.
You may be able to purchase after the event (ATE) insurance, which is taken out specifically to cover the costs risk in a dispute which is already imminent or underway. There are a number of providers of this kind of cover and under some of the schemes even the insurance premium itself only becomes payable if the claim succeeds. Again we can advise you about this and obtain quotes for the necessary insurance premium.
The Impact on the Litigation.
All this means with the right kind of case, and the right kind of Defendant (typically an insurance company or a large company with deep pockets) a costly claim can be pursued with no or minimal outlay being made or financial risk being taken by the Claimant.
If that sounds too good to be true, then bear in mind (as mentioned above) that the downside is that if we successfully represent you under a CFA, the losing party becomes responsible for all of the enhanced costs incurred along the way - including the success fee mark up and the potentially substantial costs of the ATE insurance premium.
We are obliged to notify the Defendant that we are acting on a CFA and that puts considerable pressure on the Defendant, when facing such a claim, to give much more serious consideration to whether the claim should be defended at all, or at least to take an early and realistic view on making settlement offers before the costs risk becomes too great. This can go a long way towards redressing the all too frequent David v Goliath imbalance of power which can prevent some entirely valid claims being pursued.
Risk sharing and working together
Whatever variant is used, these arrangements amount to a real change in the way that lawyers share with their clients the inevitable risks involved in any litigation. They depend on the lawyers being willing to stake their own time and money on a successful outcome following an early and realistic assessment of the likely strength and value of a claim. With our substantial experience and realistic and commercial approach the litigation partners at Rogers and Norton are always prepared to consider taking on claims on this basis and are well placed to advise you on the all the funding options that are available to you.