Home › Commercial Litigation › Funding

Commercial Litigation: Funding

Conditional Fee Agreements and After The Event Insurance

Carter-Ruck has undertaken a number of successful commercial litigation cases under Conditional Fee Agreements (popularly known as 'no win, no fee' agreements).  

We have also been able to obtain After The Event insurance ('ATE insurance') for our clients. We are now one of the very few firms of solicitors in England and Wales to have a delegated authority scheme for commercial litigation cases with Temple Legal Protection Limited, which is a market leading provider of ATE insurance.  For further information about Temple see www.temple-legal.co.uk.

 

 


In brief, if we are prepared to take a case on under our CFA scheme and ATE insurance is in place, it means:

  • Our client normally has to pay none of our professional fees until the end of the action.  Further, under the Temple ATE insurance policy, the premium is not payable until the end of the action.
  • If the litigation is won most of our professional fees and the insurance premium for the ATE policy should be recovered from the other side;
  • If the action is lost none of our professional fees are usually payable and no insurance premium is due (because it is self insured under the policy). Furthermore, any costs orders in favour of the winning party will be covered by the insurance to the limit of the cover taken out. Under Temple's standard policy, the initial limit of cover is £100,000 which can be increased to £250,000 if necessary. Above this, with Temple's agreement the limit of cover can be further increased to £500,000. Over and above this, it is necessary to go to the market for further insurance.  In one case we were able to obtain total ATE insurance cover of £6.5 million.
Our CFA scheme is thus an extremely cost efficient means of funding litigation and Temple's insurance offers a highly effective means by which to manage the costs risks of litigation.  See The Times, 7 May 2009: "Credit-crunch victims turn to no-win, no-fee for help". 

 

For us to consider offering a CFA, with Temple's ATE insurance:


  • The claim needs to be of a sufficient value (generally over £250,000) or involve a fundamental right or important principle;
  • We need to be satisfied as to the merits of the potential claim or defence; and
  • We need to be satisfied as to the opposing party's ability to pay any damages and/or costs orders.
  • If we do not feel able to offer a CFA, we may be prepared to consider offering a differential fee arrangement, whereby we will charge reduced hourly rates as the litigation progresses and enhanced rates if, and only if, the case is won.

 

How Conditional Fees and After The Event Insurance Work

 

During The Court Proceedings

  • You do not have to pay any of our professional fees.
  • You may have to pay the disbursements involved in bringing the court proceedings (these can include court fees, photocopying and courier charges, expert witness fees and other witness expenses).
  • We have insurance available through Temple Legal Protection Limited, subject to terms and conditions. Under the Temple Legal Protection Limited insurance no premiums are payable until the end of the action. The policy covers own disbursements and the other side's costs and disbursements in the event of losing the action up to a designated limit.
  • We will try to arrange that, where appropriate, a suitable barrister (or 'Counsel') acts for you also under a CFA. However, if we are unable to do this you must pay the fees of any barrister instructed; we will obtain your agreement to this first.

If You Win The Court Proceedings

  • You will be primarily responsible for paying our professional fees; most of these, however, are likely to be recoverable from the losing party.
  • You are likely to recover most of the disbursements of bringing the proceedings that you have paid from the losing party.
  • We are entitled to a 'success fee', which is calculated as a percentage of our professional fees. As with our professional fees, you are primarily responsible for paying this but most of the success fee is again likely to be recoverable from the losing party.
  • If you have taken out an insurance policy with Temple Legal Protection Limited, the premiums for the policy will become payable. However, reasonable premiums are recoverable from the losing party as part of the costs of the litigation.

If You Lose The Court Proceedings

  • You will not have to pay any of our professional fees (or Counsel's fees if Counsel is also acting under a CFA).
  • You continue to be responsible for the disbursements of the proceedings as set out above. However, if you have taken out insurance which covers your own disbursements, such as with Temple Legal Protection Limited, these may be recoverable from the insurer.
  • You are likely to be responsible for paying your opponent's legal costs and disbursements, which may be considerable. However, if you have taken out insurance, subject to terms and conditions these costs and disbursements will be paid by the insurer up to the amount of the insurance taken out. You will remain responsible for any balance due over and above the insurance. If the insurance policy is with Temple Legal Protection Limited the insurance premiums are self insured so that there is nothing to pay in this respect.

The above is intended to be a summary only of the position. Should we agree to enter into a conditional fee arrangement we will explain the position in full to you prior to signing the agreement.