If you been involved in litigation but not informed about your litigation funding options, then you may have a Claim against a law firm.
There are a wide number of ways in which a claim brought in the civil courts can be funded. The most traditional method is to pay an hourly rate – win or lose. However a variety of other funding options are open to litigants. The most popular / well known is the so called “no win, no fee” agreement. Here, it is only if there is a successful outcome that the client’s own solicitor’s costs (and sometimes the client’s own barrister’s costs as well) are payable. On top of these “base costs”, a “success fee” is also usually chargeable, fixed as a percentage of the client’s own costs. Until 31 March 2013 the success fee could be recovered from the other side in the event of a win. A “no win, no fee agreement” could potentially save the client thousands of pounds in respect of his own legal costs.
Whilst the “no win, no fee” agreement protected the client from a liability for his own costs if he lost, he was still potentially liable to pay the winning party’s legal costs. To protect against this eventuality After the Event Insurance (“ATE”) was available to purchase on the open market. The setting up of this cover fell to the solicitor and ought to have been arranged at the soonest reasonable opportunity during the case, often before court proceedings were even issued. The ATE insurance premium was not necessarily payable upfront and often it was possible to source insurance products with self – insured premiums, or deferred premiums where this cost was only payable at the end of a case. Until 31 March 2013 the ATE premium was recoverable from the losing party.
Not all law firms have been keen on offering “no win, no fee” agreements to their clients. Some may even have a blanket policy against doing so. However, whether an individual law firm offers them or not, the firm has a positive duty to inform its client of all of the options open to the client to fund their claim – even to the extent of advising that another law firm may be willing to offer a “no win, no fee”. Even if the client has been offered a “no win, no fee” they will still may have been wrongly advised if they were not informed about the prospective availability of ATE insurance, to protect them against an adverse outcome. With the likelihood that the bill for the other side’s costs is substantial, this lack of advice about ATE may give rise to a significant claim for compensation against the client’s law firm. Similarly, if the client has lost the case and was not advised of his full funding options, such as “no win, no fee”, then he may face a substantial legal bill which he might otherwise have been avoided and it may be possible to recover some of these costs from the client’s law firm.