For Business

Funding Arrangements For Your Business

There is a Chance that My Case Will Go to Court. What Costs Will I Have to Pay?

Generally

The costs involved will be solicitor’s fees and court fees.  Other costs that may be incurred are: 

  • Counsels fees, should counsel need to be instructed;
  • Fees for an expert should this be required; and 
  • Miscellaneous charges for photocopying and travel expenses.

At the end of a case, the court will often require that the losing party pay the winner’s legal costs.  If you win your case, the losing party may be required to pay your costs but if you lose you may have to pay all your own costs and expenses as well as all of the costs of the winning side. 

Private Funding (paying myself)

You may be able to pay the costs yourself.  Bear in mind however that you may have to pay the other side’s costs should you lose the case. 

Some people take out bank loans or obtain loans from relatives or employers to fund litigation but you will need to consider how you will pay should you lose the case. 

What Are My Funding Options Other than Paying Myself?

There are a number of other ways to fund litigation. Legal aid may be an option for you if you satisfy the financial eligibility test. Please note that CWJ does not deal with Legal Aid work apart from clinical negligence cases.

Legal Expenses Insurance (LEI) - Before the Event

 You must check all your insurance policies, to see if any of these cover legal expenses of your proposed claim: 

  • Car Insurance
  • Household/Contents Insurance
  • Buildings Insurance
  • Credit Card Insurance
  • Any other 

If you are in any doubt, please send us the policy so that we may check on your behalf.

You can also take out insurance to cover legal costs. See below Legal Expenses Insurance “After The Event”.            

Funding by a Professional Body/ Employer

You may be covered for the claim in question (especially if the litigation relates to your work), by your professional body, your employer or trade union.

Conditional Fee Arrangements (CFA) (‘No Win No Fee’ Arrangements)

Under the Solicitors Practice Rules, we are generally not allowed to work on the basis that our fee is a percentage of any money awarded to you in successful litigation proceedings (that means in a case begun in court).

However, we may be able to act under a Conditional Fee Agreement (CFA).  Under a CFA you generally do not have to fund our costs as they are recovered from the other side if your case is successful.  You may still have to fund disbursements as they occur and we will provide and review an estimate of disbursements as the case proceeds.

Please note that a CFA will only be an option if, upon assessing your claim, we feel there are sufficient merits in your claim for us to act for you under a CFA. A CFA is offered solely at the discretion of Clarkson Wright & Jakes Ltd, and if a CFA is unable to be offered in your circumstances, please note that the only way to continue with your claim may be by way of private funding.

NOTE: It is vital that you check all insurance policies to see if you are covered for the claim in question by legal expenses insurance. If such cover is available and a CFA is entered into with us, the CFA and any insurance you take out to cover the other side’s costs may be invalid, leaving you liable for the other side’s costs.

If you win your case

As with the alternative forms of funding, at the end of the case the court will often order the losing party to pay the winner’s costs.

Acting under a CFA, solicitors are entitled to charge a ‘success fee’ in addition to their basic costs.  This fee is a percentage of our basic costs and is determined at the outset in relation to the complexity, likely duration and prospects of success of a case.  A success fee cannot exceed 100% of a solicitor’s basic costs.  The level of success fee (like our fees in general) is subject to the approval of the Court.

NOTE :If you are eligible for pre-existing LEI or CLS (‘Legal Aid’) you may not be able to recover all your costs (including the Success fee and LEI premium) from the other side under a CFA.

Disbursements

As with private funding, disbursements under a CFA are recoverable from the other side.

Shortfall in our costs

If the court orders the other side to pay a part only of our costs, you will be liable for any shortfall.  Your solicitor may agree to reduce or waive this shortfall in costs depending on the circumstances.

If you settle your claim

Under a CFA, a successful settled claim is treated in the same manner as if you win your case in court.

If you lose your case

You will not have to pay our costs, but you are liable for our disbursements, the other side’s costs and the other side’s disbursements.

Insurance

To protect you from having to pay these costs, you may be able to get insurance.

Legal Expenses Insurance (After the Event)

There are a number of insurance products available on the market.  Some are available to be used in conjunction with a CFA only and some are available as stand - alone products.

These insurance policies, known as ‘After the Event’ insurance, provide cover against the risk of losing.  Should you lose, the insurance company will pay all or some of the costs you may be required to pay to the winning party.  You may also take out cover for your own costs.  You are still required to fund your case while it is being conducted and therefore still need to pay your costs as they arise.

The premium payable in order to take out insurance will be calculated according to the risk and the amounts involved in the case.  The higher the chances of success the lower the premium.  The premium may be payable at the outset or through instalments.  The insurer may even 'lend' you the premium by only requiring you to pay it at the end of the case.

You are entitled under legislation to claim the premium from the other side as a cost of the case in the event that you win.  The court will look at whether the premium is reasonable in all the circumstances of the case.

You are required to give certain information to the other side within seven days of entering into the insurance agreement: you need to provide only the name of the insurer and the date of the policy.  You need not mention the amount the insurance company have offered to cover.

If you have a dispute and need to discuss funding options, please contact Amanda Mehlin on 01689 887808 or by email amanda.mehlin@cwj.co.uk