Do you or your business have a claim which you wish to bring but you are wary about doing so because of the costs and risks? Are you tempted just to ‘put it down to experience’ despite the fact that you would really rather not?
If so, you are not alone in thinking this way. And you can be sure that whatever your claim (breach of a commercial contract, negligent design of a building, infringement of your intellectual property etc), your opponent is less likely nowadays to roll over, bearing in mind the large court fee of £10,000 which you will have to pay if you wish to issue court proceedings for claims worth £200,000 or more. Even if you have a good case, your opponent may just do the minimum that it has to do in response to your solicitors’ pre-action letters and then just tough it out, to see if you take the plunge and issue proceedings. When acting for claimants, we are certainly seeing more of this type of behaviour on the part of defendants / their insurers.
Of course it is not just court fees that need to be paid. Even if your solicitors are taking some of the risk on their fees (for example by way of a partial conditional fee agreement where you pay a lower rate as you proceed and your fees are either limited to this rate if you lose or they are increased to normal rates with an uplift on the difference if you win), there are other expenses too. In particular you may well need to engage an expert and you will almost certainly need counsel. Experts are not allowed to enter into risk sharing arrangements and many counsel will not do so either.
But there is an effective way forward for clients who have a good claim worth £100,000 or more against a financially secure (or insured) opponent It involves a project mentality where the solicitor, a 3rd party funder and the client all contribute towards the costs of a claim and the associated expenses, with the backing of a specialist insurer, and share the settlement sum / damages. If the case is lost, the client receives back nearly all his contribution towards fees, and his liability for the opponent’s costs is covered in full.
In other words, it is now possible to embark on virtually risk-free litigation, knowing that you can take this as far as necessary to get the right result, rather than just having to accept whatever measly offer your opponent may be willing to make at the pre-action stage. In exchange you agree to share the winnings with the funder as well as your solicitor – but these are winnings that you would not have had if you had not been able to launch the claim at all.
If you would like to discuss the information detailed above, please contact Partner Nick Horton, from our Dispute Resolution team.