Litigation is an important part of the legal system. A dispute can be brought about either by a business or by an individual, seeking compensation or justice against another party when fairness has not, in their view, been upheld. The downside is that litigation has the potential to be a costly business, with the costs involved seeming daunting to many potential claimants at the outset.
Fortunately, there are various ways of protecting yourself financially during a litigation claim. By seeking expert advice on your dispute from a litigation finance specialist such as Novo Modo, you can find out whether there is a type of litigation funding that may apply to your case.
What is litigation funding?
Many individuals and businesses simply couldn’t afford to spend large amounts of money on pursuing a litigation claim according to the Association of Litigation Funders, but this shouldn’t be a reason not to go ahead. Litigation funding means a third party pays the legal costs involved in the dispute in return for a portion of the compensation awarded if the claim is settled successfully.
How does this work?
There are various ways of obtaining litigation funding. You may be advised to apply for commercial litigation funding, which means a private commercial enterprise or a trade union is willing to cover the legal fees in exchange for a return later on.
Alternatively, your business may be advised to obtain one of a couple of types of insurance known as ‘after the event’ or ‘before the event’ insurance. Although slightly different, either can be suitable to insure you against the costs of pursuing a litigation claim.
Another option your legal team may offer is a CFA or conditional fee agreement, commonly referred to as a no-win, no-fee system. On this basis, you would only be liable for costs if successful.
All these options allow the business to continue focusing finances on operations rather than on outside legal costs. Full research is required at the outset to ensure you are entering into a safe agreement with your funder.