Funding Flashcards
Why is legal funding important?
A) Legal services are free for most clients
B) Clients need to understand funding options due to high costs
C) Only commercial clients need legal funding
D) Funding is only required for criminal cases
B) Clients need to understand funding options due to high costs
What is a solicitor’s duty regarding legal funding?
A) Choose the most expensive funding option for the client
B) Only advise on private funding options
C) Check for available funding options and ensure clients understand risks
D) Avoid discussing funding to prevent losing clients
C) Check for available funding options and ensure clients understand risks
Which of the following describes private funding?
A) The client pays legal costs from personal or business funds
B) The trade union covers legal costs
C) An insurance policy taken before legal issues arise
D) A third party funds the litigation for a share of damages
A) The client pays legal costs from personal or business funds
When is professional funding typically used?
A) When clients are purchasing a property
B) When a trade union or professional body funds the case
C) When litigation is covered by an insurance policy
D) When a third-party investor funds high-value litigation
B) When a trade union or professional body funds the case
What is Before the Event (BTE) Insurance?
A) Insurance taken before legal disputes arise
B) Insurance covering personal injury only
C) A funding method for criminal cases
D) An alternative to professional funding
A) Insurance taken before legal disputes arise
Which type of funding is publicly provided for those who cannot afford legal services?
A) Private funding
B) Conditional Fee Agreements (CFAs)
C) Community Legal Service (CLS) / Legal Aid
D) Third-Party Funding
C) Community Legal Service (CLS) / Legal Aid
Which funding method is commonly used for personal injury cases and operates on a “No Win, No Fee” basis?
A) Private funding
B) Conditional Fee Agreements (CFAs)
C) Before the Event (BTE) Insurance
D) Third-Party Funding
B) Conditional Fee Agreements (CFAs)
How do solicitors get paid under Damages-Based Agreements (DBAs)?
A) By charging an hourly rate
B) By receiving a fixed amount upfront
C) By taking a percentage of the client’s damages if successful
D) By relying on funding from the government
C) By taking a percentage of the client’s damages if successful
After the Event (ATE) Insurance is typically used when:
A) The client has no legal expenses insurance
B) The client wants to insure against potential legal costs after a dispute arises
C) The case is criminal in nature
D) The solicitor is funding the case
B) The client wants to insure against potential legal costs after a dispute arises
Which funding option involves investors covering legal costs in exchange for a share of damages?
A) Professional funding
B) Before the Event (BTE) Insurance
C) Third-Party Funding
D) Community Legal Service (CLS)
C) Third-Party Funding
Under a CFA, when does a solicitor receive payment?
A) Only if the client wins the case
B) Regardless of case outcome
C) Before starting legal work
D) Monthly, as a fixed salary
A) Only if the client wins the case
What is the maximum success fee a solicitor can charge under a CFA for personal injury cases?
A) 10% of damages
B) 25% of non-future damages
C) 50% of total damages
D) 75% of the success fee
B) 25% of non-future damages
Under a DBA, what is the maximum percentage a solicitor can take in an employment tribunal case?
A) 10%
B) 25%
C) 35%
D) 50%
C) 35%
What is a solicitor’s first duty regarding legal funding?
A) Check for BTE Insurance coverage
B) Suggest private funding as the only option
C) Offer to fund the case personally
D) Ignore funding and focus only on legal arguments
A) Check for BTE Insurance coverage
What is a key financial risk clients must be aware of when choosing legal funding?
A) Success fees under CFAs are unlimited
B) Clients may have to pay the opponent’s costs if they lose
C) Solicitors must cover all legal costs if a case is lost
D) Clients can recover all legal costs from their opponent
B) Clients may have to pay the opponent’s costs if they lose
Which charging method involves billing clients based on time worked?
A) Fixed Fees
B) Hourly Rate
C) Unbundled Legal Services
D) Third-Party Funding
B) Hourly Rate
Which charging method is commonly used for wills and conveyancing?
A) Hourly Rate
B) Fixed Fees
C) Conditional Fee Agreements
D) Professional Funding
B) Fixed Fees
What is “Unbundled Legal Services”?
A) A solicitor handling a specific part of the case rather than full representation
B) A funding method for high-value cases
C) A legal aid scheme
D) A solicitor’s obligation to cover client fees
A) A solicitor handling a specific part of the case rather than full representation
A client wants to pursue an employment dispute but cannot afford legal fees. They are offered a funding option where the solicitor takes a percentage of the awarded damages if successful. What type of funding is this?
A) Conditional Fee Agreement (CFA)
B) Professional Funding
C) Damages-Based Agreement (DBA)
D) Before the Event (BTE) Insurance
C) Damages-Based Agreement (DBA)
A client takes out an insurance policy that covers legal costs before any disputes arise. Which type of funding does this describe?
A) After the Event (ATE) Insurance
B) Before the Event (BTE) Insurance
C) Third-Party Funding
D) Private Funding
B) Before the Event (BTE) Insurance
A commercial client is unable to fund their litigation but secures an investor who will pay legal fees in return for a share of the awarded damages. What type of funding is this?
A) Community Legal Service (CLS)
B) Private Funding
C) Third-Party Funding
D) Conditional Fee Agreement (CFA)
C) Third-Party Funding
