There is no denying that the impact of COVID-19 on the British economy is going to cause financial issues for both individuals and businesses for some time to come. It will also inevitably generate an increase in commercial disputes and litigation, for example, if contracts cannot be performed and debts cannot be paid on time.
However, it might not be right for the business to put these problems off until another day, or to “muddle through” the court process unaided. At LA, we recognise that it is more important than ever to be able to access legal services and obtain legal advice at a cost which works for you.
This blog sets out some of the funding options available for litigation matters, including LA’s fixed fee initial advice scheme, which we consider helps our clients make informed decisions about whether and how to move ahead.
Fixed fee initial advice
Initiating litigation in a time of crisis may seem a daunting prospect but our fixed fee initial advice scheme may be able to provide you with the advice and guidance you need to decide whether or not to embark on the process in the first place.
The aim of providing the initial advice is to deliver LA’s clients with all of the essential information needed about a dispute at the start of a case. This assists individuals and businesses when determining whether or not it is worth pursuing their claim and, if so, how best to progress it.
We charge a one off fixed fee for this initial advice, so you know from the outset exactly what the cost will be. The scheme is available to both prospective claimants and defendants in relation to commercial matters, such as debt recovery claims, contract disputes and professional negligence.
The fixed fee includes:
- An initial meeting with you by video or telephone conference (in the light of current safety considerations) to find out more about the claim.
- Considering documents and information that we ask you to provide.
- Writing a letter to your opponent.
- Providing you with initial advice about your prospects of success.
- Advising about court procedure, including certain obligations you have during the course of the claim.
- Discussing with you the likely costs of the claim and the ways in which the litigation might be funded in your case moving forward.
For more information, please contact us to discuss your case. We can then confirm whether the fixed fee will apply to your case and how much it will be.
Other ways of funding litigation at LA
As mentioned above, one of the outputs of the fixed fee initial advice scheme is advice about how the claim as a whole might be funded. The elements making up the cost of litigation which need to be borne in mind are:
- Your own solicitors’ fees;
- Your own expenses, including court fees, and the fees of barristers or expert witnesses if the case demands it; and
- In the event of an adverse outcome, any order to pay your opponent’s costs.
LA considers with its clients various types and combinations of ways to fund their litigation. Those include:
- Hourly charging rates. This is probably the most common way of paying for solicitors’ fees. LA will provide an estimate of the fees likely to be incurred during the course of the case. Although a very traditional funding method, it can be the most appropriate way of paying for advice and representation.
- Fixed fees. Like the initial advice product, we find that agreeing fixed fees for some or all stages of litigation can provide our clients with certainty about what things will cost.
- Conditional fee agreements. These are sometimes called “no win no fee” or “no win reduced fee” agreements. CFAs work on the basis that, if you lose the case, you either not be liable to pay our fees, or will pay a lower rate. If you win the case, you will need to pay our fees, together with a “success fee.” Generally speaking, the success fee cannot be recovered from the opponent. This method of funding means that LA shares in the risk of your litigation with you, and sometimes barristers are also prepared to act on a CFA.
- Legal expenses insurance. You may already have this sort of insurance, for example as a part of a D&O, household or motor insurance policy, or by virtue of trade union membership, and that insurance (called “Before The Event” legal expenses insurance) may pay some or all of your own legal costs and those of the opponent if you lose.
If you do not have BTE insurance, “After The Event” legal expenses insurance can be sought. ATE insurance will usually cover the opponent’s costs if you lose and/or your own expenses. It will not usually cover your solicitors’ fees and so it is commonly put in place along with a CFA. The insurance premium will vary according to your prospects of success, and can in some cases itself be funded in a number of ways.
- Funding of your dispute by third parties. This usually involves a third party funder agreeing to pay some or all of your legal fees and expenses in return for a fee which is payable out of the proceeds recovered from the settlement of the claim. Whilst, in the past, third party funding was really only available for high value commercial claims with a strong chance of success, there are funders in the market who are now willing to back a lower value claim.
- Sale or assignment of your claim to a third party. This involves transferring the right to sue to a third party. The advantages are that the costs and risk of the litigation are therefore taken on by the third party. On the other hand, you are likely to have to assist the third party and can expect to receive from the third party only a proportion of what the claim is worth.
Although necessarily only an overview, it is hoped that the above illustrates that there are a number of ways of setting about getting the advice and representation that you need, so that you can progress contentious cases despite the other challenges that the global pandemic has brought about.
If you wish to speak to LA about your litigation matter, please contact the team on 01202 786340 or email Online.Enquiries@LA-Law.com.