“after the event” legal funding is a development that has caught the eye of both the legal profession and the Lord Chancellor's Department.
At a time when the Government is examining all options for funding and high costs exclude middle income earners from litigation, interest shown by insurance firms in the litigation market could offer solutions.
The first major plan for individual litigants – LawAssist – was introduced by Greystoke Legal Services this year. It offered funding up to £18,000 for cases likely to win and recover costs from the third party. If the firm accepts a case litigants contribute £350 for each block of £6,000 worth of legal advice.
It was an offshoot of Lawplan, a pilot project which was tested for 18 months. Bob Gordon, of Greystoke, says plans such as LawAssist represent “the new mood of innovation in the litigation arena”, threatening “the lives of cosy traditionalists”.
The plan differs from conditional fees in that it covers a wide range of civil litigation matters from PI to contract disputes, general tort actions, professional negligence and in- dustrial tribunals. “Unlike conditional fees, the client does not have to see additional fees being taken from his award, nor does the solicitor have to forego his costs if the case is unsuccessful,” says Gordon. The scheme could be used to cover both own and oppo nent's solicitor costs and disbursements if a case is lost.
The other key player in after the event insurance is Legal and Contingency, which offers schemes including a conditional fee protection plan and a litigation insurance policy. The Litigation Insurance plan has a minimum premium of £5,000 and covers most areas of work, except defamation and matrimonial disputes. Spokeswoman Derri-Awn Clark says it accepts cases after getting counsel's opinion and then seeks a Lloyd's underwriter.
Other insurers have looked at after the event schemes, but Chris Ward of Abbey Legal Protection says most insurers are looking to see how the first few years go and then review the situation.
Another issue which may arise is the duty of solicitors to point out to clients ways to fund their litigation and whether it is preferable to use schemes such as LawAssist or use the conditional fee route.