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Help with litigation fees: Funding and insurance options

Help with litigation fees: Funding and insurance options

help with litigation fees

Embarking on litigation or arbitration can be inherently risky and may come with significant expense. As a result, it can be incredibly daunting for some to pursue legal action as the legal costs involved can become too great. 

Understanding the costs of litigation

 Litigation fees are usually made up of your solicitor’s fees, expert fees, court fees and barrister fees.

As a general rule, the losing party will usually be required to pay the successful party’s costs; however, the court will always have discretion when it comes to making an order for costs.

If you are unsuccessful in your case, you may be ordered to pay the costs of the successful party, and you will then become the “paying party” when it comes to settling legal costs.

The paying party to a dispute will become liable for any costs incurred by their opponents, which will be detailed within their bill of costs. Costs may be assessed by a judge on a standard basis, or on an indemnity basis.

If costs are assessed on a standard basis, the court will not allow any costs that are unreasonable in amount and costs will be required to be proportionate to the value of the claim. When costs are assessed on the indemnity basis, the proportionality rule does not apply.

 It is crucial for any party seeking to resolve a legal dispute to have the sufficient resources to fund their case, no matter the outcome.

There are alternative methods of litigation funding that can be put in place to help with litigation fees. Consideration should always be given to the availability and suitability of alternative funding approaches.


Help with litigation fees: Types of litigation funding and insurance


There are various ways in which you can receive help with litigation fees. Some of the most common types of litigation funding and insurance cover we deal with include the following:


Legal expenses insurance (LEI) – LEI is a type of insurance policy that can cover legal costs in certain cases. You may have LEI as part of your home insurance, for example, although this might only cover you to defend certain actions brought against you. Check your policies to see what cover you may have access to. We can provide you with assistance in obtaining after the event insurance (ATE) cover. After the eventinsurance is a type of legal expenses insurance that can be thought of as similar to a ‘swap’. For either no upfront fee or a small upfront fee, the insurer takes on all of the risk of the potential adverse cost award.

As a result, the client has essentially swapped their obligation to pay the defendant’s legal costs in the event of a loss, with the obligation to pay the insurer in the event of a win. This is usually an attractive swap as the client is more likely to be in an improved financial position following a win than a loss. 

Third party funding (TPF) – Third party fundingis an arrangement in which a party with no prior connection to the dispute agrees to pay the costs of litigation in return for a fee payable from the proceeds to be recovered. With the help of TPF, you can avoid taking any financial risks at all as the funder covers the amount of costs to be paid in return for a share of the damages. If the case fails, the funder bears all the costs, and you will not pay anything.

 Third party litigation funding providers take on the risk of your litigation finance, freeing up your cash flow and shifting all the risk off your balance sheet.

In exchange for taking the risk, the funder will usually seek in the region of a fifth to a third of any damages recovered. That means you will keep up to 80% of the award without having to take any of the risk.


How can I benefit from alternative litigation funding and insurance?


Litigation funding and insurance cover provides a number of benefits to parties looking to pursue a legal action. It allows claims to be pursued to their fullest extent as parties do not have to be concerned about repercussions due to risk mitigation.

Whilst it is typically offered for multi track claims, some forms of litigation funding can also be used on fast track and the small claims track. However, Annecto Legal can only assist in claims where the value of the loss exceeds £100,000.


How can Annecto Legal help with litigation fees?


At Annecto Legal, we help clients realise the value of their litigation and dispute resolution claims. Our partners are lawyers that are frustrated with the traditional hourly rate funding model, and we work on their behalf to raise awareness of the alternatives available.

Get in touch with a professional member of our team today to determine which litigation cover is the correct litigation funding choice for you.

Our firm is authorised and regulated by the Financial Conduct Authority as an Appointed Representative of 2direct Limited. We have a registered office located in Manchester.

Call us today 0800 612 6587, or our business development director, Mark Beaumont, can be contacted by email

Get in touch

* Annecto Legal can only assist on case where the loss is in excess of £100,000, with the exception of data breach claims. If you need assistance on a claim worth over £100,000, please get in touch using our form or the details below:

Registered Office

Annecto Legal Ltd, 106 Kennedy Building, Murray Street, Manchester , M4 6HS


0800 612 6587


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