When it comes to legal costs and funding options for claimants and defendants, there are many different possibilities to choose from. Legal claims can be costly, especially if you make mistakes when deciding the right option for you. Here is a guide to help and advise you.
What Are Legal Costs?
Legal costs are paid like any other business service, normally on the basis of an agreed hourly rate, the scope of the work to be done, and the time spent by the solicitor. More experienced solicitors will command a higher rate due to the better quality of service, shorter timescale, and accordance with your commercial needs.
Types of Legal Costs
Overall, legal costs are the sums due from a client for his/her solicitor’s fees and are often a necessary cost of any large transaction or dispute. In addition to this, VAT may also be incurred, unless you are VAT registered, along with disbursements. If a solicitor is introduced to your problem without any previous knowledge or familiarity with the background of the matters, the parties involved, or documentation, this will take time to understand which will increase costs – it is worth it though to gain accurate advice.
Also, the legal fees charged by your solicitor can be via a funding agreement, including a “no win no fee” agreement. Plus, where a dispute exists that is required to be resolved in court proceedings (litigation), then there may be an opportunity to recover some or all of such legal costs from your opponent.
However, there are alternative types of ways – or agreements – in which legal costs can be paid, either directly with your solicitor or via funding sought from a third party.
What Are Funding Options?
There are a number of available alternative funding options to help clients pay for their legal costs from a third party. The main types of funding models are litigation funding and third party funding which then branch out to offer further different times of funding arrangements.
Types of Funding Options
Litigation funding arrangements are entered into between the solicitor and the client directly, where they agree a circumstance in which the solicitor’s fees will become payable. Third party funding refers to funding institutions that provide access to finance for potential litigants to legal action; this will often fund all solicitors’ costs and disbursements associated with legal action.
With other agreements within these two main types of funding options, it can be quite overwhelming to come to a decision what would work best for you and your circumstances. By talking to experienced solicitors who are familiar with legal cost funding models, they can help you find the one that is more appropriate for you.
