2022 seems to be the year of the eye of the storm for the UK. Over the last two years, we have been pounded by a pandemic with its knock-on effects on the National Health Service and the physical and mental health of the nation.
The economy has been thrashed amongst other things by war, global inflation, and an energy crisis. The UK is already in the throes of a full-year recession which means jobs could be lost, and with spiralling inflation and energy price hikes, wages may be unable to cover the cost of everyday essentials.
Against this bleak picture considering a legal challenge against the Will or the estate of a loved one or for your interest in your home, may seem impossible due to the potential cost.
However, even in times of hardship the circumstances that lead to such challenges continue to manifest and it may become more common place as the recession deepens that justice is not pursued because of the costs that could be incurred from a legal challenge.
Whilst legal challenges can be expensive and there is always the risk of not winning your case there are a number of ways in which the cost of dealing with a dispute may be funded with Nelsons.
Funding options
The types of funding can broadly be divided into categories:
Normal charge basis. In simple terms, this means that an invoice will be raised at regular intervals (usually monthly) for the fees and expenses that have been incurred based on the time spent on the case, at an agreed hourly rate.
Fixed fee arrangement: In some cases, it is possible to arrange a fixed fee meaning that the price quoted as a fixed fee is what will be paid regardless of the amount of time spent on the work, this is an alternative to paying at an hourly rate and can give some certainty as to costs.
Deferred fee agreements: Where parties are unable to afford to pay their costs each month, which given how expensive Court action can be is not uncommon, but at the end of the case they are to receive a significant sum, such as their inheritance or proceeds from the sale of a property then it may be possible to agree to defer the raising of an invoice until that later date.
Indemnified arrangements: Fees are paid by another party such as a trade union, employer, or family member or through public funding, an insurer, or from an estate or trust fund.
Risk sharing arrangements: Whereby payment of a fee is linked to the outcome of the case.
Examples of risk-sharing agreements are:
Conditional fee agreements: A conditional fee agreement or CFA commonly known as “no win, no fee agreements, is an agreement with a solicitor which provides for their fees and sometimes their expenses, or any part of them, to be paid only in certain circumstances. This is usually only if the case is won and compensation received but if the case is won they also get paid a success fee to take account of the risk that they would not get paid in the event the claim is unsuccessful.
Damages-based agreements: A damages-based agreement (DBA) is a form of a “no-win, no fee” agreement with a solicitor, which shares the risk of litigation. It will usually mean instead of the solicitor being paid at a conventional hourly rate, the solicitor’s legal fees are only payable in the event that the claim is successful. A DBA is not the same as a CFA. Under a DBA, if the client is successful, a straight percentage of any damages recovered is charged by the solicitor, regardless of what their fees are.
After the event (ATE) insurance: this is an insurance policy against the risk of losing a case including having to pay your opponent’s costs. It is not straightforward to decide at what stage a policy should be purchased, however, the sooner it is purchased the lower the likely premium. However, the premiums can be significant.
A legal challenge to many may seem unaffordable, however, there are options as set out above and it is always worth an initial discussion to the options that may be available.
How can we help
Lesley Harrison is an Associate in our expert Dispute Resolution team.
If you have any questions concerning the subjects discussed in this article, please do not hesitate to contact Lesley or another member of the team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online enquiry form.
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