#4693 - Funding - BPC Civil Litigation

FUNDING "funding" - who provide the money to pay client's solicitor while case is running "costs" - court order that one party should pay all/some of the other party's legal charges Costs comprise: * Solicitor's hourly charges for work * Unit costs for letters and phonecalls (unit: 6 mins) * Disbursements - includes: court fees, travel expenses, experts' fees * Counsel's fees (briefs, conferences and paperwork) Lawyers acting for a party are entitled to seek payment as the claim progresses. 3 Methods of Payment * Client has primary liability, * May recover from other party if win case, or * Funding arrangements Costs of legal rep in setting up funding are "overheads" (costs of obtaining the work) and are not recoverable from the client or losing party. Private Funding Duty to Advise on Costs and Funding Solicitor under a professional duty to advise client on: * costs of bringing matter to court (best possible information), * possible costs liability to the other side, * options and main features of funding. Must discuss how, when and by whom costs will be met Failure - retainer not illegal, but may be taken into account in assessing costs payable. Funding Arrangements Solicitor may only enter into funding arrangements which are legal and suitable to client's needs. Disbursements Sums paid by firm during the course of litigation inc: * experts fees, * counsel's fees, * costs of photocopying etc. * court fees. Client expected to pay these in addition to costs. Usually asked for "sums on account for costs" when retain and then periodically. Conditional Fee Agreements ("CFA") Agreement that client only liable to pay lawyer's fees if successful But if successful - lawyer can charge (other side): * Base costs - fees for the claim, and * Success fee - % uplift on usual costs (relating to litigation) * success fee - includes costs of any costs assessment Level of success fee - related to risk involved in the litigation (100% - 50:50 chances) Unless client also has BTE/ATE insurance - will still be liable for other side's costs if loses (though not for own costs) Formalities CFA must: * be in writing * relate to a type of case where CFAs permitted (all civil except family), and * specify the success fee - maximum 100% CFA should be agreed to include/disclude disbursements Counsel CFA If solicitor working under a CFA, then instructs counsel (who agrees to work under a CFA) - 2 separate CFAs * 1st CFA: between client and solicitor * 2nd CFA: between solicitor and barrister Notice of CFA Lawyers acting under a CFA are required (by Pre-Action Protocol) to disclose this to the other side when take first step in litigation Notice must: * state date of the CFA, * identify claim(s) to which it relates * indicate whether ATE insurance has been taken out - if so: * date of policy, * name of insurer, * claim(s) to which it relates No obligation to give details of the success fee. Payment of Success Fee