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 Courts of 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
These are complicated agreements and your solicitor must explain the terms carefully to you. They are often called "No Win, No Fee" agreements but also include agreements under which you pay capped or discounted costs in any event with full costs being charged in the event that you win. If you do win your case most of the costs can be recovered from your opponent. If you lose your case you are only liable for your own legal costs to the limited extent agreed, as long as you keep to the terms of our agreement.
If you win your case the law does allow us to charge an additional "success fee" calculated as a percentage of the basic costs. This “success fee” is not recoverable from your opponent and if we are charging a ‘success fee’ you will have to meet it from your own pocket or from damages. There are regulations in place which limit the maximum amount of success fee that can be charged.
In some circumstances, if you lose you may be liable to pay your opponent's legal costs, but it may also be possible to buy insurance to protect against this risk.
We will carefully advise you about funding in your case and if we enter a CFA with you, we will advise you at the outset about anything you may have to pay.
The availability of Legal Aid has been significantly restricted under recent changes in the law. However, it is still available for some legal action such as community care and judicial review if you are of sufficiently low financial means to qualify.
As a firm contracted by the Legal Aid Agency we can take your case on if you are eligible for public funding if there is no other more suitable form of funding available. We currently hold contracts which enable us to provide Legal Aid services in the following categories of law:
- Public law (Human Rights Act and judicial review claims)
- Community care services
- Actions against the police (and public authorities)
- Abuse of children and vulnerable adults
- Clinical negligence for birth injured children
- most inquests
When it comes to litigation, a Legal Aid certificate acts as an insurance policy if you lose your case and provides funding for legal expenses along the way.
The Legal Aid Agency must authorise all work undertaken under a Legal Aid certificate. Legal Aid is only available for limited categories of law, where your financial means are sufficiently low and where the strength of your case is sufficiently strong.
You may be required to pay a monthly contribution towards the work being done on your behalf if your income is over a certain threshold. You may also have to make a lump sum contribution if your capital and/or savings are over a certain threshold.
Finally, where you recover damages under your case, you may also have to pay back the Legal Aid Agency for any costs they have paid towards your case along the way.
The Justice web site has a tool which helps you to work out if you are eligible for legal aid: .
Download our Civil Legal Aid factsheet
Download our Civil Legal Aid in Clinical Negligence Cases factsheet
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 accounts. 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.
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.