Securing appropriate funding for commercial disputes is often one of the most significant challenges faced by businesses involved in commercial litigation. Whether a company is pursuing a claim or defending legal proceedings, the potential scale of legal expenses can create considerable financial pressure. In many litigation cases, costs can escalate quickly, placing strain on cash flow, profitability, and the overall financial stability of a business.

Without a well-structured approach, even strong claims with good prospects of success may become difficult to pursue in a practical and cost-effective way. As a result, some businesses may hesitate to move forward with commercial litigation due to the financial risks involved.

Annecto Legal provides specialist support to clients in Preston by arranging tailored commercial litigation funding solutions designed to manage the financial risks associated with business disputes. In many situations, the potential exposure to legal expenses and adverse costs can appear disproportionate to the perceived value of the claim itself.

Supporting commercial litigation solicitors in Preston

Preston has a growing and well-regarded legal sector, with a number of experienced firms offering high-quality legal services across a broad range of practice areas. Many of these firms specialise in commercial litigation and regularly handle complex litigation cases involving contractual disagreements, shareholder issues, and other business disputes.

Annecto Legal works alongside a client’s chosen legal team in Preston to support the financial structuring of commercial litigation. It is important to emphasise that Annecto Legal does not replace solicitors or provide legal advice directly in relation to the conduct of litigation. Instead, the focus is on collaborating with law firms and their clients to identify suitable funding and insurance solutions that complement the overall legal strategy.

By engaging with solicitors at an early stage, businesses are better positioned to implement a funding structure that aligns with their objectives. This proactive approach allows companies to pursue or defend claims without unnecessary financial strain.

What is commercial litigation funding?

Commercial litigation funding in Preston is an arrangement whereby a third party provides financial support to cover some or all of the legal expenses associated with litigation cases. These costs can include solicitor fees, barrister fees, expert witness reports, court fees, and other disbursements that arise throughout the life of a claim.

If the case is successful, the funder receives an agreed return, typically from the damages or settlement recovered. If the claim is unsuccessful, the funding is usually provided on a non-recourse basis. This means that the client is not required to repay the funding, thereby limiting financial risk.

This structure allows businesses to engage in commercial litigation without committing significant internal resources at the outset. As a result, litigation funding has become an increasingly popular tool for managing risk while maintaining access to high-quality legal services.

Key benefits of commercial litigation funding include:

• Risk management – reducing exposure to legal expenses and potential adverse costs
• Balance sheet protection – avoiding large liabilities associated with ongoing litigation cases
• Cash flow preservation – enabling businesses to pursue claims without diverting operational funds
• Stronger negotiating position – improving leverage during settlement discussions
• Access to legal advice – allowing businesses to pursue meritorious claims that might otherwise be unaffordable

Funding can be applied across a wide variety of commercial disputes, including contractual claims, partnership disagreements, professional negligence matters, insolvency-related claims, and complex multi-party litigation cases.

Funding options available in Preston

Annecto Legal works with a broad network of established litigation funders and insurers. Our role is to assess the merits of each case, understand the client’s commercial objectives and identify the most appropriate funding structure.

After the Event (ATE) Insurance – ATE insurance protects clients against the risk of having to pay an opponent’s legal costs if a claim or defence is unsuccessful. In commercial litigation, adverse costs exposure can be substantial, particularly in High Court proceedings.

ATE premiums are often deferred and contingent upon success, meaning the premium is only payable if the case succeeds. This structure enhances cash flow management and ensures that legal expenses are aligned with the outcome of the dispute.

Third Party Funding (TPF) – Third party funding involves a professional funder paying some or all of the legal expenses associated with pursuing or defending a claim. This can include solicitor fees, counsel fees, expert evidence and court fees.

In return, the funder receives an agreed percentage of any damages or settlement recovered, typically ranging between 20% and 33%, depending on the value, complexity and risk profile of the case.

By removing the need for substantial upfront legal spend, TPF enables businesses to pursue a claim without placing strain on internal resources. It is particularly valuable where multiple parties involved share an interest in the outcome.

Fee arrangements and cost management

Alongside funding and insurance solutions, Annecto Legal helps clients and their legal teams explore a range of solicitor fee arrangements that support the overall litigation strategy.

These may include:

• Conditional fee agreements
• Hybrid fee structures combining hourly rates and success fees
• Damages-based agreements
• Fixed-fee stages for specific parts of litigation
• Success fee arrangements linked to outcomes
• Work-in-progress (WIP) insurance

Selecting the right combination of fee structures and commercial litigation funding in Preston provides greater predictability and control over legal expenses throughout a dispute.

How Annecto Legal can assist

Early advice is important when a commercial dispute arises. Annecto Legal works with clients and their Preston-based solicitors to assess case merits, identify appropriate funders and structure funding and insurance solutions that support the chosen litigation or dispute resolution strategy.

By working closely with law firms across Preston, we help clients reduce exposure to adverse costs, protect working capital and pursue commercial litigation with confidence.

If you are involved in commercial litigation in Preston and have concerns about legal costs or financial risk, Annecto Legal can help. We provide specialist guidance on funding solutions, ATE insurance and fee arrangements, working alongside your legal advisors to ensure that the most effective financial structure is in place for your case.