Litigation Funding Flashcards
Base Costs
Normal legal costs. Usually based on an hourly rate.
Disbursements
Expenses paid out on behalf of the client for goods or services provided to the client e.g., barristers or court fees.
Conditional Fee Agreement (s58 Courts and Legal Services Act 1990)
An agreement for litigation services where the legal representatives fees and expenses (in part or whole), are payable only in particular circumstances, i.e., no win no fee, or only if a certain award is given.
What fees are payable in a CFA when a client wins their case?
Base costs and disbursements are usually recoverable from losing party under Part 44 costs rule.
Firm is also entitled to charge a success fee.
What fees are payable in a CFA if the client loses?
There is usually no charge for base costs incurred, and no success fee.
Client will usually still have to pay disbursements.
What is a success fee in a CFA?
An agreed percentage uplift to the base legal costs incurred.
What are the limitations on success fees?
Percentage uplift cannot exceed 100 percent of the usual hourly rate.
For personal injury claims the success fee is limited to 25 percent of the damages for pain and suffering.
Are success fees recoverable?
Usually payable by the client and only recoverable in certain circumstances.
Where it is recoverable, the court and other parties must be made aware of the existence of the CFA. Full terms only required to be disclosed when costs are being assessed.
When can CFAs be used?
Available in most areas of the law (except family and criminal proceedings).
Used most often in personal injury claims, and smaller value commercial cases, where client may not otherwise be able to proceed.
What are the requirements for a CFA?
Must be in writing.
Must comply with any requirement prescribed by the Lord Chancellor (if any).
Where it contains a success fee, it must state the percentage by which the fee is increased as a result of it being a CFA.
Damage Based Agreement (contingency fee agreement)
Agreement for litigation services under which the client must make a payment to the person provide the services if the client receives a financial benefit. Amount of payment is determined by reference to the amount of financial benefit.
What fees are payable in a damage based agreement if the client wins?
Base costs are usually recoverable from losing party under Part 44 costs rule.
A DBA percentage fee is recovered from damages that the client receives.
What are the limitations on DBA percentage fees?
Legal costs limited to 50% of the total damages recovered by client.
In personal injury claims, costs are limited to 25% of general damage, suffering and loss of amenity, and damages for past monetary loss.
What are the requirements for a DBA?
Must be in writing; and
Specify the following:
- The claim or proceedings (or parts of them) to which the DBA relates;
- The circumstances in which the legal fees, expenses, and costs (or part of them) are payable; and
- The reason for setting the amount of payment at the level agreed.
When are DBAs used?
Typically used in higher value commercial situations.
