Funding options for legal services Flashcards
What are 5 options for funding legal services?
- Private retainer
- Conditional Fee Agreement
- Damages Based Agreement
- Legal Expenses Insurance
- Third Party Funding
What is a conditional fee agreement?
If client wins claim, client pays success fee (based on solicitor’s usual charging rate - max. 100%)
If client loses, they don’t pay their own fees but may be liable for disbursements &/or opponent’s costs
What are the formalities requirements for a CFA to be valid?
Must be in writing & state percentage of success fee
What is a Damages-Based Agreement?
If client wins claim: opponent pays client’s costs & client pays % of damages to own solicitor
If client loses claim: doesn’t pay own fees but may be liable for own disbursements &/or opponent’s costs
What is the maximum contingency fee that can be charged in a Damages-Based Agreement?
Max. fee: 50% of damages
Except:
- Personal injury cases: 25% of PSAL damages
- Employment cases: 35% of damages
What formalities requirements are there for a Damages-Based Agreement to be valid?
Must be in writing & specify the:
a. Proceedings to which the agreement relates
b. Circumstances in which fee is payable
c. Reason for setting fee at level agreed
What does after-the-event insurance cover?
Disbursements & an opponent’s costs
Appropriate where client doesn’t have before-the-event insurance
Are third party funding agreements valid?
Yes (in absence of impropriety or wrongdoing)
When can a solicitor commence a claim to recover costs?
One month after delivery of final invoice
Nb. courts do have discretion to allow commencement of claim early
Are business agreements for funding legal services enforceable?
Yes (ie. client can’t apply to court for assessment of costs) if:
Contentious business agreement:
1. In writing
2. Signed by client
3. Contains all terms of agreement
4. States in writing it is a contentious BA
Non-contentious business agreement:
1. In writing
2. Signed by client
3. Contains all terms of agreement
