Funding Options (Legal Services)

Question 1

What is Conditional Fee Arrangement ?

Answer 1

The solicitor only charges a fee if you win. If you lose, you pay no solicitor’s fee.

If you win, you pay the agreed fees (base fee + success fee) and disbursements

If you lose, you usually only pay disbursements and potentially the opponent’s costs (unless separately insured).

Question 2

What is Damages Based Agreement (DBA)?

Answer 2

The solicitor’s fee is a set percentage of the damages you recover. If you recover nothing, you pay no fee.

If you win, you pay the solicitor a percentage of your damages plus disbursements

If you lose, you generally pay no solicitor’s fee but remain liable for disbursements and possibly the opponent’s costs.

Credit would be given to the client for costs ordered to be paid by her opponenet.

Question 3

Practical Effect of Fee Cap (CFA & DBA)

Answer 3

CFA Cap: Success fee cannot exceed 100% of the standard fee and 25% of general damages in PI cases

DBA Cap: Limits solicitor’s share of damages to 50% (general), 25% (PI), or 35% (employment)

Question 4

Who Chooses the Solicitor Under BTE Insurance?

Answer 4

Initially, the insurer might insist on using their panel solicitors

Once court proceedings are started, the client can usually choose their own solicitor. This gives the client some freedom while still benefiting from insurance coverage.

Question 5

Staged Premiums in ATE Insurance

Answer 5

How it Works: The insurance premium might start low and increase as the case progresses.

Encourages early settlement and reduces initial financial outlay for the client. If the case lasts longer or goes to trial, the premium escalates.

Question 6

Scope of ATE

Answer 6

ATE typically covers the opponent’s costs and the client’s disbursements. It less commonly covers the client’s own legal fees.

Question 7

Eligibility of ATE

Answer 7

Insurers usually require a strong case, often with a greater than 60% chance of success, before providing ATE cover.

Question 8

Before-the-Event (BTE) Insurance

Answer 8

BTE insurance covers legal expenses before a dispute arises. It may be included in household or motor insurance or purchased as a standalone policy.

Question 9

What CFA is invalid ? (125% instead of 100%)

Answer 9

The client should refuse to pay the success fee at all. not only reduce to 100% but at all!!