The costs of bringing legal action, particularly in relation to civil claims, are unfortunately for a lot of people extremely high. Despite the introduction of the civil procedural rules to, amongst other things, deal with this issue, the average man or woman is still extremely unlikely to be able to afford to bring a civil litigation claim in the UK without financial assistance. If you are considering a claim and decide to visit a solicitor for legal advice, the solicitor should also discuss with you options for funding the case.
Who is liable for legal fees?
A common trap that people may full into in regard to funding a claim when they have a good prospect of success, is to assume that the other side will have to pay their costs when they ‘win’ the action.
Whilst it may well be the case that the judge awards costs against the defendant, this is not always the case and even if there is a cost award it is unlikely to cover all of your costs.
This is in addition to the problem of actually getting the money from the defendant. A solicitor should warn you that you are liable for his costs whether you win the case, lose (unless you have entered into a no-win-no-fee agreement), or the defendant is ordered to pay your costs.
As a result of the problems of funding a case, a solicitor should advise you about the availability of after-the-event insurance (AEI). This provides cover for the other side’s costs should you lose the action as well as your disbursements (court and barrister fees etc).
Insurance does, of course, cost and so you will have to pay a premium to get AEI which will be based on a calculation of how likely your claim is to be; obviously, if your case appears an extremely risky one to bring then the insurance company will request an extremely high premium.
If you were to purchase AEI and win your claim then it may well be possible to claim the premium you have paid back from the other side.
This is subject to the reasonableness of the fee in the first place.
One particular problem with AEI is the fact that you will not receive any money until after the case concludes. Therefore, in the meantime you will still have to pay your legal fees in addition to the initial premium. This is one of the main reasons why AEI does not always help those who cannot afford to run a claim.
However, there are alternatives to AEI, in particular certain before-the-event insurance policies which many people are unaware they have.
A common example would be purchasing legal insurance when you buy your car insurance.
This will usually cover you should you bring a claim due to a road accident. A solicitor should also advise you on other potential insurance policies that you may not know you had the benefit of.
For example, many household insurance policies do provide insurance policies should you bring an employment claim against your employer. For this reason you should always check your insurance documentation in regard to funding claims.
Litigation can be very costly and insurance polices can take away a lot of the stress relating to uncertainty over having to pay. You should ask your solicitor for advice on insurance should you see them about bringing a claim.
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