Funding options for your Civil
& Commercial matters
Funding Your Case
Navigating the legal system can be daunting, especially when considering the financial implications. At Witan Solicitors, we understand that funding your case is a crucial aspect of accessing justice. To help you make informed decisions, we provide an overview of various funding options available, ensuring you can choose the arrangement that best suits your needs.
Why Funding Matters
The erosion of legal aid has made it increasingly challenging for individuals to afford legal representation. However, legislative reforms and innovative funding arrangements have broadened the options available to litigants. These include agreements with solicitors, third-party funding, and tailored insurance policies. Below, we outline the key funding methods and what they mean for you.
Funding Options
1. Conditional Fee Agreements (CFAs) commonly known as ‘No win No fee’
Often referred to as "no win, no fee" agreements, CFAs allow clients to avoid paying legal fees upfront. If you lose your case, you won’t pay your solicitor’s fees. If you win, you’ll pay:
- Standard fees and expenses.
- A "success fee" (an uplift on the standard fees, capped at 100%).
Important Note: Since April 2013, success fees are no longer recoverable from the losing side and must be paid by the client (except in specific cases).
From October 2023, fixed costs were introduced for all claim below £100,000. Therefore, at Witan Solicitors we cannot offer a CFA for cases worth less than £125,000.
2. Damages-Based Agreements (DBAs)
A damages-based agreement is a contingency fee arrangement where your solicitor’s payment is tied to the outcome of your case. If you win, your solicitor receives a percentage of the damages awarded. If you lose, you generally pay nothing.
- Key Features:
- Available for most civil cases since 1 April 2013 (excluding criminal and family proceedings).
- Percentage of compensation payable is agreed upfront (and cannot exceed 50%).
- No payment required if the case is unsuccessful.
This can be a cost-effective option, as payment depends entirely on the case’s success. We will always need to assess the likelihood of success and the potential value of the damages before agreeing to a DBA. Typically, we only offer DBA’s to claims of over £250,000.
3. After-the-Event (ATE) Insurance
ATE insurance is taken out after a legal dispute arises. It covers:
- Your opponent’s legal costs if you lose.
- Your own disbursements, such as court fees and expert reports.
ATE insurance is often combined with CFAs or third-party funding to mitigate financial risk.
Difference from Before-the-Event (BTE) Insurance: BTE insurance, typically included in household or motor insurance policies, is purchased before a dispute arises and covers legal costs within specified limits.
4. Third-Party Funding
In this arrangement, a commercial funder pays your legal fees and expenses in exchange for a share of the damages if you win. If you lose, the funder absorbs the costs.
- Advantages:
- No upfront costs for the client.
- Risk is shifted to the funder.
- Considerations:
- The funder’s fee can be significant, depending on the risk and complexity of the case.
5. Crowdfunding
Crowdfunding involves raising funds from the public to cover legal costs. Platforms like CrowdJustice allow individuals and organizations to campaign for public interest cases or personal legal battles.
- Examples of Use:
- Judicial reviews.
- Civil disputes with significant public interest.
- Potential Risks:
- If the case is lost, donors or the crowdfunding platform could potentially face liability for the opponent’s costs.
Crowdfunding remains a relatively new and evolving method of litigation funding.
6. Trade Union Funding
Trade unions often provide free legal advice and representation for their members in certain disputes. However, this funding may be restricted to specific case types and may have associated costs.
7. Public Funding (Legal Aid)
Legal aid has become more restricted since the implementation of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO 2012). To qualify:
- Your case must fall within the scope of legal aid.
- You must meet financial eligibility criteria (means testing).
Alternative Initiatives: The idea of a Contingent Legal Aid Fund (CLAF) has been explored as a self-sustaining pooled fund to support civil litigation claims, but it remains in the early stages of development.
At Witan Solicitors we do not offer Legal Aid funding.
8. Pure Funders
A "pure" funder contributes to the legal costs without expecting any profit or control over the litigation. They are reimbursed only for the amount contributed if the case succeeds. This funding is rare but offers an alternative for claimants seeking ethical support without profit motives.
Combining Funding Methods
It is common to use a combination of the above funding options, such as:
- A CFA or DBA with ATE insurance.
- Third-party funding alongside a "waterfall agreement" to allocate proceeds among stakeholders (e.g., the claimant, solicitor, insurer, and funder).
Our team can help you explore these options and structure agreements that suit your case.
Get in Touch
Understanding how to fund your case can be complex. Witan Solicitors are here to guide you through your options, ensuring transparency and clarity at every step. Contact us today for expert advice and support in funding your legal claim.