Negligence Blog Part Two: Funding Your Claim against a Professional
In the second of his guides on funding litigation, Robert Johnson, Partner & Head of Professional Negligence at Healys, outlines alternative funding options for you to consider when pursuing a claim against a professional.
If you are considering a professional negligence claim against a professional you may be concerned about the costs involved to pursue your claim. In the first guide we explored risk-sharing retainers and covered how Healys LLP can:
(1) provide you with a degree of certainty in relation to what your costs are likely to be; and
(2) help to minimise/eliminate any funding requirements from you
In this article, we will examine how you might be able to obtain assistance from insurers and third party funders as an alternative means of financing litigation.
There are two types of insurance which may be available to fund litigation:
- A pre-existing insurance policy (“before the event insurance”) which provides cover for legal expenses. It is also now relatively common for legal expenses cover to be included in a standard home or motor insurance policy. Such policies are, however, frequently limited in what they cover and may include restrictions on your freedom of choice of lawyer. In any event, “before the event” cover is usually for a finite sum and therefore alternative means of funding are often used in conjunction with it. Robert recommends that you look at the insurance policies which you have in place to check whether or not legal expenses insurance is included. He will be happy to advise you on this point if you wish him to do so. Indeed, if in doubt, he strongly recommends that you let us have a copy of the policy.
- Insurance policies which are taken out to provide cover for the cost of litigation after a dispute has arisen (“after the event insurance”). The premiums for these policies depend on a number of factors, most importantly, the amount of cover required. These policies can provide protection against the possibility of you having to pay the total costs of litigation in the event that you lose a case. Insurance cover can be purchased in respect of your opponent’s legal costs, your own disbursements (including Court fees, Counsels’ fees and experts’ fees) and also your own legal costs. It is usual for these policies only to pay out in the event that you lose your case completely. In certain circumstances, the payment of the premium can be deferred until the end of the case when it is hoped (but cannot be guaranteed) that you will have the damages from which to make the payment (see below).
Robert Johnson and his team have often arranged “after the event” insurance for their clients in order to assist them in pursuing their claims. Robert has been doing this for his clients for over 20 years and as a consequence has built up extensive expertise in such matters. He has also built up very strong relationships with various “after the event” insurers. If you feel that you may have a claim and want to seek to take advantage of Robert’s expertise in such matters, please call him on (direct dial) 020 7822 4106 (mobile) 07899 973306.
“Robert Johnson and his team at Healys took over a complex professional negligence claim where we had provided ATE insurance cover. It was clear that Robert Johnson had a good understanding of the issues in the case (which were not without complications) and Robert’s calm and determined attitude was a positive factor in our agreeing to transfer the insurance cover as we had confidence there would be an acceptable outcome.
Robert Johnson and his team provided any information that we sought in a well prepared and well thought manner and were firm and decisive in dealing with the claim. On a personal note, Robert is a true gentleman, very easy to deal with and always available to respond to any queries raised.
It has been refreshing to work with Healys and we would do so with pleasure in the future”.
Prue Furby, DAS
Third Party Funding
It may be possible to borrow money from an independent third party lender to fund the cost of bringing a claim (and, less commonly, a defence). That funding will include this firm’s fees together with disbursements including barrister’s and expert’s fees. Third party funders, generally speaking, require prospects of success of at least 60% and generally set a minimum level of damages claimed, below which they will not be prepared to assist.
In essence, third party funders make a charge for their lending, which is paid out of the damages recovered and usually calculated as a percentage of the funding (e.g. 30% to 40% of your award OR 5 x the amount lent). You will have obligations to the funder as to how you conduct your case.
Third party funding may seem (and indeed is) expensive. It is most suitable when you do not have sufficient resources to bring the claim and where you are unable to fund significant disbursements but where the value of your claim is significant (probably more than £2 million).
This type of funding can be used in combination with one or more of the funding options outlined in Robert’s previous guide, for example to fund expenses such as barrister’s fees or expert’s fees where the claim is being run under a Conditional Fee Agreement.
Robert Johnson and his team have arranged third party funding for their clients in order to assist them in pursuing their claims. Robert has been doing this for his clients for over 20 years and as a consequence has built up extensive expertise in such matters. If you feel that you may have a claim and want to seek to take advantage of Robert’s expertise in such matters, please call him on (direct dial) 020 7822 4106 (mobile) 07899 973306.