What is FISCUS?
Businesses no longer need to invest and risk their own capital to fund a legal claim. FISCUS is the funding package that we can offer clients to help manage the financial risk of litigation and move those costs off your balance sheet.
We try to make what can otherwise be a minefield, simple and transparent. If you have a claim that is:
- winnable; and
- there is a commercial financial benefit to you in pursuing the claim;
we will propose a funding arrangement. The rest is a commercial decision for you.
We will only recommend funding if it is in your best interests. We can advise you on whether your claim is suitable for funding.
When you might wish to use funding
Some litigants apply for litigation funding to pay their legal costs because without it they would not be able to afford to pursue an action at all. But this is not the only situation in which litigants seek to use litigation funding. Some litigants, despite their ability to fund the litigation on their own account, would rather take the option of the support provided by a litigation funder. This may be because:
- They prefer to share or transfer the risk of pursuing the claim (even though they will have to pay some of the damages to the funder if they are successful).
- Legal budgets are limited and third party funding allows a company with multiple claims to finance more actions than their limited budget would otherwise allow.
- It is commercially convenient to take the cost of funding litigation off the company balance sheet completely.
The funding options
We can share the risk with you
We are confident in our judgment and strategy meaning that in appropriate cases we are willing to share risk, and in some cases offer no risk arrangements, in respect of our fees.
Our team has over 40 years’ litigation experience and has worked with various funding arrangements for more than 15 years. This combined technical expertise and our flexible approach enables us to help you find the best funding solution.
Normal hourly rates
Under this type of agreement, you will pay an hourly rate for the work. The amount that you will pay for your fees will be the same whether you win or lose. In addition, you will also be responsible for paying your expenses or disbursements.
If you are successful, you may be able to recover from your opponent some of the fees, expenses and disbursements that you have paid. If you are unsuccessful, then in addition to your own costs, you may have to pay some of the fees and disbursements incurred by your opponent.
In low value and straightforward cases, we may be able to cap our fees or offer fixed fees for a defined scope of work or stages of the litigation. In addition, you will also be responsible for paying your disbursements.
If you are successful, you may be able to recover from your opponent some of the fees and disbursements that you have paid. If you are unsuccessful, then in addition to your own costs, you may have to pay some of the fees and disbursements incurred by your opponent.
Third party funding
Litigation funding is where a third party, with no connection to the litigation, agrees to finance all or part of the legal costs of the litigation in return for a fee payable from the proceeds recovered by you in your claim. The fee is not normally payable if your claim is unsuccessful and therefore this funding does not operate as a loan. If the litigation is lost a third party funder will lose their investment and no sums will be repayable.
A third party funder can range from a small funder with limited investment capital to large international funders. Third party funders are unconnected parties to the litigation and are investing in the litigation by funding the legal fees incurred in pursuing the litigation in exchange for a fee. Third party funders’ fees are typically calculated as a multiple of the cash invested or a percentage of monies recovered.
Conditional fee agreements (“CFA”)
One of the benefits of this type of arrangement is that it transfers some of the risk of pursuing litigation to your solicitors. Under this type of agreement, in exchange for the solicitors agreeing that they will not seek recovery of some or all of their fees if a case is unsuccessful, you agree to pay the solicitors a success fee in addition to their normal fees if the case is successful. The success fee is calculated as a percentage of the normal fees and cannot be more than 100%. The success fee is not recoverable from your opponent.
If you are unsuccessful, then in addition to your own expenses and disbursements plus any sums due to your solicitors under the CFA, you may have to pay some of the fees and disbursements incurred by your opponent.
Please note that this type of agreement can be terminated on certain grounds by you and your solicitor and in those circumstances you may be charged fees.
Damage based agreements (“DBA”)
This type of agreement is similar to a CFA, however instead of your solicitors charging you on a time spent basis, the solicitors’ fees for the work conducted in pursuing the litigation is charged as a percentage of the damages recovered. The percentage is agreed at the time the parties enter into the agreement and can be no more than 50%. In addition to any sums due under the DBA, you will also be responsible for paying your expenses or disbursements (barrister’s fees will, in certain circumstances, be included under the terms of the DBA).
If you are unsuccessful, then in addition to your own expenses and disbursements, you may have to pay some of the fees and disbursements incurred by your opponent.
Subject to a full review and analysis of your case and the prospect of success, we may offer this form of funding.
It is worth checking any existing insurance policies that you may have. Commonly, legal expense insurance is often included as an additional benefit on insurance policies and premium banking packages. You may also have purchased a specific product to cover certain risks which may provide cover for legal fees for the litigation you are contemplating. This applies to individuals and businesses.
If you have existing insurance, there are usually time limits for making a claim for your legal costs and so it is important to discuss any potential existing insurance cover with us at the earliest opportunity and provide us with copies of the relevant policies. If you do not comply with the requirements of the insurer, you may lose the benefit of any cover that is available to you. If you are not sure whether you have this cover, you should make enquiries with your insurance broker and/or insurers as to whether you have any such cover and if so, you should inform us immediately.
Whether your existing insurer will agree to provide cover for this particular dispute will depend upon the insurer’s review of the case. We cannot guarantee that the insurer will agree to provide cover for this particular dispute or that the extent of the cover available will be sufficient to cover all of the legal costs.
If you do not ask us to review your existing policies or contact any potential insurer, we will presume that you have checked your policies and you are satisfied that there is no possibility of legal expenses insurance being available to you.
If the level of cover is unlikely to be sufficient to cover your own fees and disbursements as well as your opponent’s fees and disbursements, it may be possible to ‘top up’ your existing insurance by buying additional insurance (see below).
Insurance can be purchased to cover the risk of paying some of the expenses of litigation. This is known as After the Event insurance or ATE. An ATE insurance policy can be purchased to cover your risk of paying your opponents’ fees (to include disbursements) and/or your opponents’ fees (to include disbursements) plus your own disbursements should you be unsuccessful in the litigation. ATE policies will not normally provide insurance cover for your own solicitors’ fees.
Generally, the premium paid for an ATE insurance policy is not recoverable from your opponent if the litigation is successful (there are exceptions for some personal injury, clinical negligence, and defamation disputes). Payment of the premium for an ATE insurance policy may be deferred until the conclusion of the litigation and/or the premium may be self-insuring which means that it is not payable if the litigation is unsuccessful.
Whilst we are not insurance brokers, we can assist you with making an application to an insurance broker and/or ATE insurer and advise you upon the suitability of the terms of any insurance policy. We cannot guarantee that an application for insurance will be successful, that the extent of the cover available will be sufficient to cover all of the legal costs, or that payment for the premium will be deferred and/or self-insuring.
In order to consider whether insurance may be offered, an insurer will usually require a detailed case summary and the opinion of a barrister that your prospects of success are greater than 60%. You will need to pay for our services in liaising with any ATE insurer, preparing the application, obtaining an opinion from a barrister and complying with the terms of any ATE insurance policy. These costs will not be recoverable from your opponent.
If an ATE insurance policy is purchased, it is important to comply with the terms of the policy which will include providing reports to the insurer on the progress of the case, any offers that are made during the litigation and the prospects of the litigation.
Litigation funding loan
You can explore the possibility of obtaining a specialist litigation loan to fund your costs and disbursements as they are being incurred. This may be a suitable option if you are unable to afford to pay the costs and disbursements at present but will be in a position to pay off the litigation loan once your matter has resolved.
Loans are provided as a facility which allows you to draw-down what you need and when you need it, that is, when the costs and disbursements need to be paid. Interest is usually charged only on the amount you draw-down and not on the full loan. Hence, you only pay interest on the amount you use. These loans are usually repayable whether or not you are successful in the litigation. Litigation loan providers may also require security for the loan. Sometimes litigation loan providers offer an insurance policy, at an additional cost, to repay the loan if you are not successful. Some litigation loan providers offer loans that do not have to be serviced during the course of the case, i.e. there are no monthly payments.
We are an approved firm for Novitas Loans, one of many litigation loan providers who provide litigation loans for some contentious probate and clinical negligence claims. We are not recommending Novitas Loans and we have no influence over their decision to lend nor can we give you advice on this product. However, if you are interested, we can provide you with their literature for your consideration, as one of the options available.
Membership organisations and associations
If you are a member of an organisation, trade union or similar association, you may have legal expenses insurance or other funding assistance as a benefit of your membership which may assist you to pay the costs of this matter and/or with your opponent’s costs if unsuccessful.
If you have this benefit, there are usually time limits for making a claim for cover or funding and so it is important to discuss this with us at the earliest opportunity. If you do not comply with the requirements of the organisation, you may lose the benefit of any cover or funding that is available to you.
If you are not sure, you should make enquiries with your membership organisation as to whether you have any such cover or assistance and if so, you should inform us immediately.
Whether any insurance or other funding assistance is available to you for this particular dispute will depend upon the organisation’s review of the case and/or your eligibility. We cannot guarantee that the insurer will agree to provide cover for this particular dispute or that the extent of the cover available will be sufficient to cover all of the legal costs.
If you do not ask us to make enquiries about the availability of a membership benefit, we will presume that you have checked your membership benefits and you are satisfied that there is no possibility of legal expenses insurance or other funding assistance being available to you.
If the prospects of a claim are strong enough, we will work with you to find a suitable funding arrangement to enable you to seek redress and manage the costs of litigation.