Nabarro to offer fixed fees for all litigation clients

Nabarro is launching a new regime of fixed-fee deals across its litigation practice which will see the firm shoulder risk for its clients. 

For the first time the firm will offer a single headline price for an entire dispute, agreed at the start of the case. Clients will also be offered fixed prices for certain stages of a case or specific tasks.

The project is led by head of litigation Jonathan Warne, who also spearheads the firm’s research into issues facing general counsel.

Instead of hourly rates billed at the end of the case clients will be advised to pay the fixed fee in monthly bills in a bid to appeal to general counsels’ desire for more predictable budgets.

For cases which end earlier than expected, payment will be made up to the last stage in the proceedings. However for cases which go on longer than expected or take unplanned turns, the firm will end up taking a hit.

The firm has set limits to the scope of the fixed bill to reduce that risk. Changes of party, substantial increase in the number of witnesses and separate actions are three developments which would fall outside the single fee.

It also includes a contingency “to cover the possibility of having to make or defend applications to complete stages of the proceedings”.

For a 12-month case the new plan could translate to a bill of £250,000, split into 12 payments of £20,833. Among the proposed stages, the most expensive is trial and preparation. Nabarro’s example puts that cost at £75,000 compared to the cost of the witness statment stage of £50,000.

As part of the system, Nabarro has developed a new time management software system with its finance team. Nabarro said its own tailored system enable it to break down mandates into small chunks, which it would apply pricing estimates to.

Clients will also be presented with a questionnaire at the start of proceedings asking for more intensive detail than in the past. Nabarro is offering free consultations with the litigation team in order to assess the resources needed for the case and plan a budget.

No time estimate was given for the process but it is the firm is expected to be aim for a quicker turnaround than third-party funders, who undertake the same analysis.

Head of litigation Jonathan Warne said a key part of that meeting would be to assess what work could be automated and done by in-house teams and what work would need to be the most heavily resourced.

All firms are currently under pressure to prioritise project management, ensure costs are more tightly managed and budgets are prepared earlier.

The Jackson Reforms aimed at cutting the cost of civil litigation were brought into force in April 2014, bringing with them a new cost-budgeting regime.

But Warne said the scheme was not about cutting costs but about creating a more efficient process which appealed to general counsels’ need for predictability in litigation.

The firm is not the only one to have launched new funding models in recent months (17 February 2014). Addleshaw Goddard introduced a range of funding options last year badged as Control, and Jones Day piloted new damages-based agreements in 2013 (17 December 2013).

Firms have also typically offered to fix fees for specific chunks of work like disclosure, where time and effort is more easily predicted. However Nabarro said its “proactive” move to market an end-to-end fixed-fee product was a step change with other “reactive” offers.

Warne said the focus on large-scale commercial disputes and arbitrations marked  a break with the past, when funding arrangements like conditional fee agreements (CFAs) were connected to high-volume work like personal injury.