Funding your case
Paying for legal action
Leigh Day can give you the highest quality of advice on the costs of legal action and finding the method of funding that is right for you.
In England and Wales, the general rule is that the loser of the court case pays the costs of the winner. These costs are separate from the damages or compensation awarded by the court. This means that at the outset we have to consider the costs and benefits of the case, how it is to be paid for, and if the matter can be settled without litigation.
Developments in the funding of cases over recent years mean that those pursuing legal action now have more choice than ever as to how their cases are paid for.
Conditional fee agreements
This method is the most modern way of funding your case. They are complicated agreements and your solicitor must explain the terms carefully to you. They are often called "No Win, No Fee" agreements. This means that if you do not win your case you are not liable for your own legal costs. If you win you are liable for your costs but the costs should almost all be paid by your opponent. It is crucial to realise that if you lose your case it is highly likely that you will be made liable for your opponent's legal costs.
If you win your case the law allows us to charge a "success fee" calculated as a percentage of the basic costs. Your opponent is liable to pay at least the majority of the success fee, in addition to paying your damages. We will only enter into a conditional fee agreement with you after we have evaluated the merits of your case. If you enter into a conditional fee agreement you will need to buy an accompanying policy of insurance to protect you from an adverse costs order in the event that your case was lost.
Public funding
Public funding, previously known as legal aid, is still available for some legal action such as clinical negligence, but it's not available for straightforward personal injury litigation any more. A certificate of public funding acts as an insurance policy if you lose your case and provides funding for legal expenses along the way. The Legal Services Commission must authorise all work undertaken under the scheme. You may be required to pay a monthly amount on account for the work being done on your behalf, but this is repaid when the case finishes. Public funding is only available to clients with a limited amount of money, and where the case seems likley to be successful.
As a firm franchised by the Legal Services Commission we can take your case on if you are eligible for public funding if there is no other more suitable form of funding available.
The Community Legal Service web site has a legal aid calculator which helps you to work out if you are eligible for public funding.
Trade union funding
Some trade unions have a legal advice and assistance scheme which allows you to obtain advice from an approved solicitor. If you are a member of a trade union, you will probably be entitled to a free initial interview to decide whether you have a case which is likely to succeed. Your union may then fund the whole of the case for you and there will be no risk that you will have to pay the costs.
Sometimes the union will act as insurance if your case is not successful. Usually, this method of funding means that the claimant gets all of their compensation at the end of the case and has no risks of paying the legal costs. Some Unions even have schemes to pay for cases brought by your children or spouse.
Legal expenses insurance
This kind of insurance policy is purchased before the accident happens and is usually attached to other insurance policies such as household, travel or motor insurance, for a small annual fee. Sometimes insurance is attached to credit card agreements, or as a benefit attached to bank acounts. Similar to legal aid, this policy will cover costs in the event of a case losing but it does not cover all the costs of the claim if the case is successful. You need to tell your solicitor about any possibility that you may already have insurance.
Private funding
This is the most straightforward method of funding legal action but also the least popular. The lawyer undertakes the work, the client pays and if we win the case, the lawyer will try to recover the costs from the defendants. Unfortunately if we lose the case the client is also responsible for paying the costs of the defendants. This form of funding is unpopular because the client takes all of the risk of the case losing and of paying the other side’s costs. They also have to find a substantial amount of money up front to fund the expenses of the claim.
