Practical ways to fund your legal costs if your dispute goes to court
- If you’re concerned about the cost of taking your dispute to court, there are funding options that can help you.
- The options include legal expenses insurance, third party funding and a no win, no fee approach.
- We can explain the pros and cons of each of them, and help you decide the most appropriate route for you.
Going to court to resolve a dispute can prove costly, and may become even more expensive if you have to pay the other party’s costs too. This could be a major concern if you’re not sure you will have enough funds to cover the cost of litigation. However, there are other options open to you and here we explain your choices.
Legal expenses insurance
Taking out legal expenses insurance could be a sensible option. There are various types of policies available, such as ‘before the event’ and ‘after the event’. Before you decide, it’s important to know exactly what the policy covers. For example, it could cover just your own costs or the other side’s costs if you lose, or do both.
You may well have an existing insurance policy, such as your home insurance, that includes legal expenses cover. It’s well worth checking your insurance policies to see if you have this cover, and what level of cover it will provide.
The insurer will want to be kept in touch with how the case progresses and will most likely want to have their say on how the dispute is handled. Often your insurers will recommend or insist you use one of their panel solicitors. A panel solicitor may be cheapest, but not necessarily the best, and is likely to be more interested in keeping costs down for the insurer than delivering the best result for you. You are entitled to choose your own solicitor, and we recommend you do this whenever possible.
If you decide to take out legal expenses insurance, you’ll need to allow for the cost of your premium as you are no longer able to recover the premium from your opponent even if you win.
Third party funding
This could be an option for you if your dispute has a high net value and a strong chance of success. The third party funders will pay all or some of the costs involved in your litigation. If your case is successful they will expect their payments returned, plus a share of the damages. This route is worth considering if you can’t afford the expense of litigation or want to minimise your risk.
Sharing the risk with your legal advisers
This is another possible route open to you. We may be able to work for you on a no win, no fee basis or for a reduced fee (known as a Conditional Fee Agreement). Alternatively, we could agree to taking a share of the damages (a Damages Based Agreement). We’ll be happy to discuss these options so you can decide which is best for you.