Sources of funding: overview
Legal aid
You may be able to fund your case by obtaining Legal Aid. Currently, two main forms of Legal Aid are available: Legal Help and Legal Representation. Legal Help is limited to legal advice needed to prepare for court, while. Legal Representation is available for court proceedings. Contact Community Legal Advice to see whether you're eligible.
Non-profit centres
Funding may also be available via local authority law centres and other non-profit agencies that provide legal advice, such as charities and pressure groups. Most of the agencies that provide free legal advice, however, focus on issues related to housing, debt, immigration, welfare benefits and employment. Moreover, many of the centres are overworked and have a limited amount of time to spend on each case.
Private funding
If you're funding your case privately, you'll probably agree a fixed hourly rate with your solicitor for the work he/she does. Your solicitor is required to give you an initial estimate of the costs of bringing/defending the case and to regularly update you on costs they incur.
Many people consider funding litigation themselves a scary option as there are no guarantees about how much you'll eventually have to pay in legal fees -- unless, of course, your solicitor agrees on a fixed fee or costs capping (where you limit your costs to a set amount).
In addition, you also have the burden of paying your opponent's legal costs if your case is unsuccessful.
Trade unions / employers
Trade unions often offer free legal services to their members. And sometimes employers will offer legal funding to their employees to, although this is less common. Free legal services is typically viewed as a "perk" of union membership / employment. You probably will not have your own choice of solicitor and will have to use the one appointed for you -- or pay for a different one privately. And usually the trade union / employer will not have any liability to your opponent in the event you lose your case -- instead, you will have to pay their costs yourself.
Conditional fee agreements
In some cases, your solicitor may be prepared to pursue your legal claim on a "no win no fee" basis. This means that the solicitor (or her/his law firm) assumes any risk that your claim may fail. Ordinarily, the solicitor will want a "success fee" or "uplift" as compensation for taking this risk.
If you decide to instruct a solicitor on this "no win no fee" basis, you will enter what's known as a Conditional Fee Agreement ("CFA"), which sets out the details of the arrangement. While a CFA may protect you against having to pay your own solicitor's costs if you lose, you may still have to pay your opponent's. Many people acquire "after the event insurance" (see below) to cover against this risk.
You can use a CFA for all types of cases except for family and criminal matters.
Contingency fee agreements
These are also known as "damages-based agreements" or "no win no fee agreements", and they're fairly common in the United States, but still relatively new in the United Kingdom. If your solicitor agrees to represent you under a Contingency Fee Agreement, they will be able to claim a percentage of any monetary awards they win on your behalf -- thus, unlike in a conditional fee arrangement (discussed above), your solicitor will deduct their fee from your actual damages or settlement amount, rather than charging a success fee on top.
As with a conditional fee agreement, if you lose your case you won't have to pay your solicitor a penny, but you will still have to pay your opponent's costs -- unless you acquire "after the event insurance".
Most solicitors require a contingent fee of around 25-35% of the gross settlement amount. The contingency fee will be nearer to 35% if the risk of losing is higher, if the potential award will probably be on the low side, and/or if the case requires a lot of time and effort to prepare.
'Before the event' legal expenses insurance
Before the event legal expenses insurance policies can be found as "add ons" to most household and motor insurance policies.
Normally cover is limited to legal costs incurred for consumer, property or employment disputes, or personal injury claims.
Moreover, most policies will not cover your case unless it has a reasonable prospect of success and you are prepared to accept a reasonable offer of settlement (should it be offered). Also, there may be limits on your choice of solicitor (e.g., they may have to be a member of a specified panel.)
'After the event' legal expenses insurance
Usually you purchase this type of insurance after litigation proceedings have begun.
It is also known as 'ATE insurance', 'litigation insurance', 'conditional fee insurance', and 'post-event insurance'.
This insurance may extend only to your opponent's costs (if you have a CFA with your solicitor) or it may cover all of your costs, including your own solicitor's fees.
You pay your ATE insurance premiums at the end of you case and if you win your opponent will have to cover the cost.
ATE insurance can be purchased for nearly all areas of litigation and is frequently used in civil disputes.
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