Commercial & Professional Negligence Litigation
Filor Solicitors acts both on behalf of claimant organisations and individuals involved in commercial or professional negligence disputes and who are seeking a relatively risk free remedy.
Historically potential claimants with meritous claims have been reticent about pursing litigation primarily due to costs, the risk of losing as well as the amount of time it takes for a case to get to trial. There are a now a number of different ways of funding claims that help reduce the risk (or avoid entirely) adverse costs orders if a claim is unsuccessful.
After The Event Insurance and Conditional Fee Agreements
It is possible to pursue a claim by securing After The Event insurance funding ("ATE"). In broad terms, provided a claimant has a claim whereby the prospects of winning are over 50%, then the risk of losing and then having to pay the other side’s costs are eliminated by ATE.
ATE can be arranged for a few thousand pounds up to several million. ATE can be purchased both before the proceedings have been issued and at any time afterwards. The later ATE is taken out the more expensive the premium becomes.
ATE insurers will normally require a written barrister's opinion as to merits, and provided a claim's prospects are deemed to be good (and ATE is secured), a claimant will have no further outlay other than the usual disbursements such as Court and expert fees.
A claimant's own legal costs can be eliminated entirely if the claimant’s solicitors are prepared to work entirely at risk under a Conditional Fee Agreement ("CFA"). If the claim is successful then under a CFA the solicitors can recover their costs plus an uplift from the defendants. Barristers who may also be instructed are increasingly willing to work under a CFA.
CFAs come in a number of different guises and as well as catering for 'no win no fee' agreements they can also cover 'shared risk' situations whereby the claimant pays a reduced fee (or discounted rate) to his solicitor. Thereafter, if the case is lost there is nothing to pay as ATE will protect any adverse costs, however if the case is successful then costs are recovered from the defendant. The solictor can also seek to recover any difference in fees (i.e. the balance of the agreed discount not charged to the client) from the defendant together with an uplift if a hybrid CFA is used.
The range of insurance products now available to fund litigation is both well established and innovative. Claimants can in some cases obtain deferred premiums (i.e. they only pay if the case is won, in which case the insurance premium is also recovered from the defendant).
CFAs mean that claimants can pursue claims with a very limited downside.
Before The Event Insurance
Companies and individuals can purchase Before The Event Insurance ("BTE") specifically to cover the prospect of funding future claims. For most companies taking out BTE it is considered as part of an overall package of insurances for its operations, however for individuals BTE can usually be found as an "add-on" to mainstream buildings and home contents insurance. In alot of cases individuals don't even know that they have the benefit of BTE cover.
If BTE is available then it ususally provides cover for costs (both sides) up to a specific cap. The disadvantage of BTE is that the cap (or limit of indemnity) can be fairly modest with the result that there may be a potential shortfall in cover depending on the size of the claim and likely costs. The way round this problem is to try and "top up" with ATE in order to cover any addiitonal exposurenot covered by BTE.
Third Party Funding
With Third Party Funding (TPF) a professional investor will offer to fund the claim in respect of legal costs. If the case is successful then the investor will be entitled to an agreed percentage of damages recovered.
The proportion of damages paid out to the investor cannot be recoverd from the losing party so there is an obvious impact on the amount of monies that the successful claimant is left with at the end of the day.
TPF is a complex area and it is advisable to use the expertise of specialist insurance brokers if this type of cover is being contemplated.