Litigation funding and legal expenses insurance often go hand in hand. In some cases, ATE insurance alone will be insufficient and the client will need interim funding to progress the claim. However, litigation funding is not available in all circumstances, with funders requiring strong prospects of success and a substantial monetary claim. Furthermore, the investor will require a success fee which cannot be recovered as part of costs and instead will be taken from the client’s damages (in the event of a successful outcome).
Because it is a more expensive method of funding litigation, finding the correct funder is essential in order to secure the best possible terms for your client. If you are already looking at legal protection insurance, the same litigation risk transfer broker might also be able to offer options for third party funding from a number of investors. By tapping into their contacts and expertise you will be able to access better options for your client.
As with an ATE premium, the funder’s success fee is only payable in the event of a success. In this instance, the funder will take an agreed slice of the award. Where third party funding is combined with ATE insurance, the amount of exposure faced by the client is reduced considerably. In order to get the best possible terms on all of these options, finding the best broker should be a high priority.