Funding your litigation

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Home > Services for business > Commercial litigation and dispute resolution > Insolvency > Funding your litigation

How we can help you

As a mechanism for resolving a dispute, litigation can be costly both in time and expense.

We will advise you on the best approach based on your circumstances – and if an alternative to litigation may yield a more cost-effective or prompt result then we will advise you on your options. If litigation is the best approach for you then there are various ways that this can be funded.

How Napthens can help

The following sections detail how we can support the process of funding your litigation.

Hourly rate

Traditionally, legal services have been supplied on this basis, and it remains the preferred method for many clients. In civil litigation cases, the Senior Courts Costs Office of the High Court in London publishes the appropriate hourly ‘guideline’ rates for solicitors across England and Wales.

We will provide you with an estimate of costs for each stage of your case to allow you to make informed decisions.

Legal expenses insurance

Often referred to as ‘before the event’ insurance (BTE), this is something you might already have without knowing it. It might be included as an add-on to your home or car insurance, so it’s always best to check your policy.

There may be time limits for notifying your insurer and your insurer may prefer you to use their solicitors. However, you can insist on choosing your own solicitor to deal with your case (although this attests the terms of cover).

Conditional fee arrangement

These are funding arrangements between a claimant and their solicitor, where the solicitor agrees to be paid a proportion or even all the fees if you reach a successful outcome. Therefore, these agreements allow a solicitor and client to share the risk of litigation.

If successful a success fee is paid by the client in addition to the normal hourly rates.

Deferred fee

A deferred fee can be used by clients who are asset rich but cash poor in circumstances where the outcome of the litigation will lead to the disposal of valuable assets.

Here the solicitor will agree to defer payment of fees until completion of the work but will charge a premium for delaying receipt of payment.

After the event (ATE)

ATE insurance is taken out specifically to cover your legal expenses relating to a specific event that has already happened. This might be limited to the money your solicitor has to pay out to pursue your claim and the other side’s legal costs.

It tends to go hand in hand with a ‘conditional fee arrangement’. Your insurance premium is not recoverable from the other side.

Third-party funding

You enter into an agreement with a third-party investment company for them to pay all or part of your legal costs in return for a slice of your damages if you win. Typically, they might expect a return of 2:1 on their investment.

Your agreement might allow for some contribution to the other side’s cost if you lose.

Combination funding

You may be able to combine some funding methods into a package to cover various legal costs that will have to be incurred to pursue your claim with protection from liabilities should you not succeed.