If you are reading this, the chances are that you are already involved in litigation, and are looking for ways to fund that litigation. You are probably in no doubt that you need help to fund the litigation. Litigation is a notoriously risky and lengthy process. The costs of hiring solicitors and counsel to advise and run the case can be horrendous. Even where a case settles before trial the costs can run into hundreds of thousands of pounds. If the case goes onto a full trial it will be more expensive still. And should it fail to succeed at court, then not only is the money spent irrecoverable, adverse costs might be awarded. These can run to an additional hundreds of thousands. So whoever you are, as a would-be litigant or an already committed one, then the answer is in no doubt. You need all the help you can get to help fund your litigation.
Fortunately options which provide help with litigation funding needs have proliferated in recent years. The biggest development has been the rise of litigation funding companies (sometimes also known as third party litigation funders or legal financing companies). Such companies draw up a commercial agreement with the litigant (usually the claimant) whereby they will agree to finance all or some of the client’s legal fees, but in return for a share of the case proceeds (also known as recovered damages) if the case wins. Such funding might be seen as a loan with interest; however, it is more than that because the funding company is sharing in the client’s risk. Where the case loses, the funder bears the full costs incurred and would have to write-off the funding as a lost investment. So obviously you might not just need such help to fund your litigation, you might positively covet third party litigation. Even if you had the money put aside, why risk your own when the litigation funder can take the risk for you?
There might be several types of client seeking litigation funding to pursue their claim. It might be you, the impecunious individual, genuinely without the funds to do it yourself, in which case you might well have to abandon your claim. Equally you might be a company, perhaps pursuing a huge, commercial breach of contract claim against a supplier. If you are involved in a group action, perhaps a shareholder dispute, then along with your fellow claimants funding could be crucial to co-ordinate and organise such a complex legal action. Whichever type of litigant you are though, be warned: less than 5% of applications for funding get it. Few funders would take on cases that did not have at least a 60% chance of succeeding. Equally the quantum value of the claim must be high enough to warrant funding. Cases where the claim is at least £5million are the ones most attractive to funders. Securing funding on a worthwhile claim can be timely and involve much due diligence establishing the strength of the claim. Litigation funders draw up stringent budgets. There is no point their funding risky cases. So if your case secures funding, you can be assured it has not only convinced your first set of lawyers, but a second, independent opinion, Also your risk and initial outlay is also reduced when you secure a third party funder because they will usually insure against loss, in the form of an After the Event insurance policy. Again if you have a case which can’t secure ATE insurance, you should be getting the message to abandon it.
If you have already consulted a solicitor. Indeed, your solicitor ought already to have discussed all funding options available to help you finance your claim.(See Rule 2.03 of the Solicitors’ Professional Code of Conduct.) In addition to the litigation funding route, others to be advised on, might include conditional fee agreements (CFA), where fees would be paid at the end of a successful case. Sometimes a combination of funding options can be used simultaneously: again it is the solicitor’s duty to explain these to his client, and to advise accordingly. Solicitors on top of their game will have established contacts with reputable funders. On a final note of advice these will be members of the Association of the Litigation Funders of England and Wales.
This article was written by Vannin Capital. Visit their website to learn more about business litigation