Funding Options for Commercial Litigation Legal Costs

Pursuing or defending a claim in the civil courts can be daunting and uncertain. At JMW, we seek to provide clarity on the range of ways you might be able to fund litigation if you’re involved in a dispute. 

Whether you are an individual or a business, there are options available to you to fund your case depending on certain factors such as the complexity and value of the dispute, your prospects of success and your appetite for risk.

Our experienced team of litigation lawyers is here to assess the merits of your legal position and advise on your potential funding options. To speak to a member of the commercial litigation team about your circumstances, call us today on 0345 872 6666, or fill in our online enquiry form to request a call back.

Paying your legal fees on a privately paying basis  

We would describe this as a traditional retainer whereby we provide an estimate of our anticipated legal fees for each stage of the matter and, upon receipt of your instructions, we undertake the work on your behalf and charge you on an hourly rate basis. 

Our hourly rates range depending on the level of experience of your solicitor and we will help you to decide the appropriate level of solicitor to take on your case. This funding option means you pay your legal fees yourself without any external assistance.

Paying your legal fees on a fixed-fee basis

This is where we agree to undertake the work for you on an agreed fixed-fee basis as the amount of work involved can be reasonably pre-determined. This is typically where a specific piece of work or unique project is undertaken, and you require certainty in terms of budgeting your legal costs.

Conditional Fee Agreements (CFA)

A CFA is a financial agreement between JMW and you whereby we agree to share the risks and costs associated with litigation. This option is commonly known as a ‘no win, no fee’ agreement. 

If your claim is successful, you will be liable to pay our legal fees together with a ‘success fee’, which is expressed as a percentage uplift on our standard hourly rates (to be defined in the terms of the CFA and agreed with you), plus any disbursements.  

If your claim is unsuccessful, no legal fees will be payable to JMW but you may have to pay the successful party’s costs and disbursements, plus your own disbursements, subject to having suitable insurance in place to protect against that risk.  

In order to determine whether we can enter into a CFA, we need to assess the strengths and weaknesses of your claim, together with the risks associated with the litigation, the likely costs involved with pursuing the claim, as well as the ability to recover the costs and damages from your opponent. In order to undertake that initial assessment, we may need to request a payment on account of our legal fees from you.

Partial Conditional Fee Agreement

Also known as a discounted conditional fee agreement, this is where you pay a percentage of our standard hourly rates (usually 50%) during the claim, and we defer the balance of our legal fees pending the outcome of the case, whether that be at a final hearing or upon settlement.  

If you succeed (as defined by the terms of the CFA), you will be required to pay the balance of our fees (for example, the remaining 50% of our standard hourly rates) plus a ‘success fee’, together with any disbursements.

Damages Based Agreements (DBA)

This is an agreement between you and JMW where we would take a pre-agreed percentage share of your damages in payment of our legal fees in the event you succeed with your claim. In the event you lose, you will not be required to pay any of our legal fees.

Third-Party Funding 

At JMW, we work closely with third-party funders who agree to provide capital investment - in the form of funding for any combination of solicitor’s fees, barrister’s fees and disbursements - to parties wishing to pursue their claims. These are often in cases where without such funding the pursuit of such claims would not be possible.

Upon a successful outcome, the third-party funder receives a return on their investment plus a substantive fee, which is usually based on a multiple of the investment sum or a percentage of the damages awarded in consideration of the financial risk they have taken in pursuing the claim. 

Third-party funders will work closely with us to consider the merits of the case and the prospects of success, and the likelihood of recovery before deciding whether to provide funding. Ultimately, a third-party funder needs to have some certainty that if they do invest in the claim, there are sufficient prospects of a successful outcome and of making a successful recovery of their investment. In the event the claim is unsuccessful, the funder loses its investment and is not entitled to recover any sums. 

We have preferred suppliers of litigation funding that are available for claims over a certain value. The funding is provided in conjunction with an ‘After the Event Insurance Policy’ (ATE) being taken out and positive advice from counsel as to the prospects of success of the proposed claim. We also have access to leading funding brokers, who can review the market for third-party funding options. 

If you would like more information about third party funding, please call us on 0345 872 6666.

Legal Expenses Insurance 

After the Event insurance (ATE)

This is a legal expenses insurance policy that is designed to pay your opponent’s costs and disbursements (known as ‘adverse costs), up to a certain level, if the claim you are pursuing or defending is unsuccessful.  

ATE insurance is generally used by claimants only but some ATE providers offer cover to defendants in litigation. 

In addition to providing cover for your opponent’s costs and disbursements, some ATE policies also provide cover for the disbursements that you incur in pursuing your claim, and some ATE providers also provide cover for an element of your own legal fees. 

ATE cover enables parties to pursue litigation without the risk of having to pay out large sums if unsuccessful and helps to demonstrate to your opponent that you are able to run the case all the way to a conclusion.

ATE policy premiums are usually deferred and contingent upon success, meaning they are payable by you at the conclusion of the case upon a successful outcome being achieved. The amount payable will depend upon the stage at which the case reaches a successful outcome and there is nothing to pay in the event of a loss.

ATE policy premiums cannot be recovered from your opponent unless your case involves publication or privacy proceedings.  

Before the Event Insurance (BTE)

This is another form of legal expenses insurance that is often an additional insurance cover provided under individual or business insurance policies to protect against the costs associated with any potential legal issues and proceedings that might arise at some future point. Many individuals and businesses will have this cover attached to an existing insurance policy.

To find out more about how JMW can help you with your options for funding your dispute, call us on 0345 872 6666, or complete our online enquiry form and a member of the team will call you back.