Funding

Question 1

Private funding

Answer 1

Client funds any type of legal work through own private resources.

Question 2

Professional funding

Answer 2

Funded by trade union or professional organisation, for any legal work but most likely in relation to civil/criminal litigation.

Question 3

Before the event (BTE) insurance

Answer 3

Taken out before the need for legal work arises, often sold conjunction with other insurance policies. BTE premiums tend to be low (<1% of insurance cover sought). Can fund any legal work but most commonly litigation. Not generally recoverable from the other side if successful.

Question 4

Community Legal Service (CLS)

Answer 4

Legal Aid, provision of public funds to assist in procurement of legal services for those who couldn’t otherwise afford it.

Question 5

Eligibility for civil CLS funding

Answer 5

generally for individuals having low income with claim relating to children/family disputes/homelessness/domestic violence. Client must also have a sufficiently meritorious position in claim.

Question 6

Conditional fee agreements (CFAs)

Answer 6

no win no fee agreement, if successful solicitor paid normal fee or basic fee plus a successful fee of up to 100% on top of normal fee(party cannot recover success fee from an opponent, must come out of damages). In PI claims, success fee mustn’t exceed 25% of general damages.

Question 7

Damage based agreement (DBAs)

Answer 7

No win no fee agreement, if successful solicitor paid a
proportion of the damages awarded to client by way of a remedy. Max amount capped at 25% of the damages in PI cases, 35% in employment tribunal cases and 50% in all other cases.

Question 8

After the event insurance (ATE)

Answer 8

Taken out after a dispute has already arisen, usually covers client’s own disbursements and opponents costs & disbursements, often used in conjunction with CFA/DBA where CFA/DBA covers solicitor’s costs. It is more expensive than BTE and is not recoverable from other party.

Question 9

Third party funding

Answer 9

Provided by banks, private equity firms/hedge funds. if claim succeeds funder receives money back plus an uplift. Generally limited to commercial cases of high value. Association of Litigation Funders has created a code of conduct which its members agree to abide by.

Question 10

Methods of charging a client

Answer 10

Hourly charging
Fixed fees
Unbundled legal services