Cases that may go to Court or to a tribunal are known as ‘litigation'. It is always difficult to estimate the likely costs of such a case. There are risks and uncertainties such as:-
• Might the dispute be settled early?
• Will the other side fight all the way?
• Will expensive expert evidence be needed?
These and other questions cannot all be answered when you first come to us for advice.
Our clients will normally be expected to meet the legal charges and expenses of their own case.
There are however a number of alternatives. Please let us know if you want information on any of these:-
• Community Legal Service Funding. Now only available on a very limited basis in litigation cases. This may be available to you. However, we do not undertake cases on this basis.
• Funding from third parties such as a professional funder, friends, family or employer.
• Risk sharing:
Those who may offer a risk sharing arrangement include:
a) Professional funders
b) Insurance companies
d) A combination of Lawyers and Insurance Companies.
Some cases will simply not be suitable for risk sharing. Remember too, that some third parties that offer to fund you will normally expect to share the rewards. This may have costs consequences for them and about which we can advise in more detail if necessary.
Risk sharingwith legal expenses insurers
'Before the Event Policies'
There are legal expense insurance policies, usually with an annual premium, to provide cover for a possible future legal problem. You may have one, for example, as an ‘add on' to a home contents policy, car insurance policy or through your credit card. We should warn you that they are frequently very limited in what they cover and may include restrictions on your freedom of choice of lawyer. If you think that you may have any such policy, please let us see the latest insurance policy schedule and terms and conditions.
'After the Event Policies'
These are policies that help to cover the cost of litigation once the dispute has arisen. If the premium is affordable, then it can provide some peace of mind against the possibility of paying the total litigation costs if you lose the case.
Insurance cover can be purchased to protect against:
• Your opponent's legal charges, if you lose
• Your own 'disbursements': expenses such as court fees and experts fees
• Your own legal charges
The usual basis of such policies is that payment is made only if you lose completely.
Paying the Premium
The problem with all insurance is paying the premium. Points to consider are:
• The money has to be found for the premium.
• The Access to Justice Act makes it possible for the court to order your opponent to pay you this premium if you win. But you should not count on this.
• Premiums for lower value cases are modest. For other types of litigation, for example, they may be about 20% of the total legal charges against which you want to protect yourself.
• In substantial commercial litigation, the premiums can be 40% of the estimated costs.
In this section we are providing information rather than specific advice. We cannot be aware of all of the possible insurance policies available to the public. We do not undertake any responsibility to give you 'best advice' on these products. While any policy or funding arrangement which we suggest to you will be believed by us to be suitable, we cannot guarantee that the means of funding adopted by you will necessarily be the most appropriate to your needs.
Risk sharing with lawyers
Until recently, Solicitors were not permitted by law to offer clients any such arrangements. There are now various possibilities:
• A conditional fee agreement - inaccurately but frequently called 'no win - no fee'. If this is offered, your lawyer makes no charge if the case is lost but you have to pay
your 'disbursements' and your opponents' legal charges. If you win, your lawyer charges a 'success fee' on top of the normal hourly rate: your opponent may be ordered to pay at least part of these charges.
• Contingent fees - an hourly rate is agreed as being payable if the case is won but the rate is reduced if the outcome is unsuccessful.
There are a number of other points you should bear in mind.
The idea of 'no fee' or 'reduced fee' is obviously attractive to clients but there are other aspects of such arrangements:
• Instead of simply being a client and independent adviser, we will be sharing a joint venture with you. We will be entitled to have a say in the conduct of the litigation.
• We will carry out a risk assessment at the beginning of the case and at times during it to decide whether we are prepared to take it on or continue with it
• We usually require you to pay for the initial investigation into your case before deciding whether to offer a risk sharing arrangement.
• If we are to share the rewards with you, you will have to satisfy yourself whether our proposal is fair and reasonable. You cannot expect us to advise on that!
Unless you agree with us one of the other funding arrangements mentioned in this page, we will need you to sign our terms and conditions of business which set out our charges on an hourly rate basis.
Regular payments on account of these charges will be expected and we will not be able to start work on your case until our terms are signed. Under this arrangement you do of course know that you are paying for wholly independent legal advice and that you retain control of your own litigation. For instance, please tell us if you wish to place a limit on the costs being incurred up to, for example, the issue of court proceedings, or to try to provide you with an estimate of the next stage of your case. Remember that an estimate is only a guide, not a binding quotation. Actual costs can be substantially smaller or substantially greater than estimated costs.