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Funding Notes

LPC Law Notes > Civil Ligitation Notes

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FUNDING






Conduct
O(1.13) - You must provide your client with the best possible information about the likely overall cost of the matter.
O(1.6) - Fee agreements must be suitable for the client's needs and take account of their best interests.
IB(1.13)-(1.21) - Fee arrangements with your client
Insurance
Before the Event Insurance [BEI]
After the Event Insurance [AEI]
Client may already have funding in place as a  Where there is no existing policy, insurance can benefit of an existing legal expenses insurance be purchased specifically to cover the costs of policy.
the proposed litigation.
Often included with household or motor  Generally, if a claimant fails in his claim he will insurance - specifically ask client if there is any be ordered to pay his opponent's costs. AEI can insurance in place which might fund litigation.
cover this liability and is often (but not always)
If so, you should check the extent of the cover used with a CFA or DBA to do so and to cover available and any conditions or exclusions.
disbursements for which the client remains responsible.
Conditional Fee Agreement [CFA]
S.58(2)(a) Courts and Legal Services Act 1990: an agreement for advocacy or litigation services which provides for the lawyer's fees and expenses to be payable only in specified circumstances.
The most common arrangement is for the CFA to provide for a success fee (a percentage increase in the fee if the case is won) - the solicitor takes a risk when he agrees to run a case under a CFA and also agrees to delay collecting his fee; he also has no guarantee that he will ever be paid.
If your client wins
If your client loses
Fee plus uplift (success fee)
No fee
Success fee subject to statutory cap:
 Losing opponent pays costs between the

Must not exceed 100% of solicitor's costs.
parties.
o For personal injury claims, must also not exceed 25% of the damages agreed or awarded (excluding those for future financial losses).
Client pays success fee (and shortfall between costs between the parties and base costs, if any).
Damages Based Agreement [DBA]
S.58(AA) Courts and Legal Services Act 1990: an agreement for advocacy, litigation or claims management services which provides for payment for the service to be determined by reference to the amount of financial benefit obtained.
If your client wins
If your client loses
Fee determined by financial benefit obtained
No fee
Subject to statutory cap
 Losing opponent pays costs between the

For claims not involving personal injury, the parties.
payment must not exceed 50% of the sums recovered.
o For personal injury claims, the payment must not exceed 25% of the damages recovered (excluding those for future financial losses).
Client pays shortfall between costs between the parties and base costs, if any.
Costs Not Covered by CFAs or DBAs
Disbursements
Liability for opponent's costs (also see QOCS below)
BUT client can buy AEI for liabilities not covered by CFA or DBA

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