Litigation Funding & ATE Insurance

Managing the cost and risk of litigation

The strength of a claim is only one part of the decision to litigate. Cost, risk and cashflow often play an equally important role.

Court fees alone can exceed £10,000 for claims valued over £200,000, before legal fees, expert evidence and other litigation costs are considered. There is also the possibility of an adverse costs order if a claim is unsuccessful, as well as the potential requirement to provide security for costs during the proceedings.

If the cost of litigation is influencing whether you pursue a claim, funding and insurance arrangements may provide a practical solution. Used effectively, they can reduce financial exposure, preserve working capital and give you greater certainty when making decisions about a dispute.

Our commercial dispute resolution lawyers regularly advise clients on litigation funding and insurance solutions, helping them understand the options available and whether those options support their wider commercial objectives.

We work closely with specialist funders and brokers to secure arrangements that reflect the value of the claim, the likely costs involved and the level of risk a client is prepared to accept. In some cases, funding and insurance can be structured with little or no upfront cost, with payments deferred and linked to the outcome of the claim.

Our services

After-the-event (ATE) insurance

ATE insurance is designed to protect against the risk of paying an opponent’s legal costs if a claim does not succeed. Depending on the policy, cover may also extend to solicitor fees, counsel fees, expert costs and other litigation-related disbursements.

For many clients, ATE insurance provides reassurance that a significant costs liability will not arise if proceedings do not produce the desired outcome. Premiums can often be deferred until the conclusion of the claim and, in some circumstances, may only become payable if the claim succeeds.

Our insurance lawyers advise on the availability and suitability of ATE cover, working alongside specialist brokers to identify solutions that fit the particular circumstances of the dispute.

ATE insurance is now widely used across a broad range of claims, including commercial disputes, insolvency litigation, group actions, medical negligence matters and personal injury claims.

Litigation funding

Not every business wants to fund litigation from its own resources, even where it has the means to do so. Preserving cashflow and deploying capital elsewhere may make better commercial sense.

Litigation funding allows a third-party funder to meet some or all of the legal costs associated with a claim in return for an agreed share of any damages recovered. If the claim is unsuccessful, the funder will typically lose its investment rather than seeking recovery from the claimant.

As the funding market has matured, opportunities have expanded beyond the highest-value disputes. Funding is increasingly available for mid-value commercial claims, giving businesses greater flexibility when considering whether to pursue litigation.

Our funding solicitors regularly advise on funded claims and can help you assess whether funding is likely to be available, whether it is commercially attractive and how it may affect the overall strategy for your case.

When funding and insurance may be appropriate

Funding and insurance are not simply tools for claimants who would otherwise be unable to litigate. They are increasingly used by businesses and individuals who want to manage risk carefully and avoid committing significant capital to a dispute.

You may wish to consider funding or ATE insurance if you are:

• Concerned about the cost of pursuing a claim.
• Looking to protect against adverse costs exposure.
• Seeking to preserve cashflow while litigation progresses.
• Managing a dispute where legal spend would otherwise affect business operations.
• Looking for greater certainty when assessing litigation risk.

Every dispute is different. The availability of funding or insurance will depend on factors including the merits of the claim, the likely value of any recovery and the anticipated costs of the proceedings.

By considering these options at an early stage, you can make informed decisions about how best to pursue or defend a claim and avoid unnecessary financial risk later in the process.

If you are considering litigation and would like to understand whether litigation funding, ATE insurance or other funding arrangements may be available, our insurance lawyers can help you evaluate the options and determine the most appropriate approach for your circumstances.