Commercial litigators: No CFA? No Problem – with Temple Litigation Insurance
A Conditional Fee Agreement for commercial dispute is not a requirement with Temple, we regularly insure cases funded by traditional retainers; commercial litigators often prefer a more conventional fee payment structure to the ‘no win no fee’ arrangements more commonly used for personal injury.
The businesses and individuals who pay their solicitor’s fees as the case progresses may prefer the certainty of knowing how much they are paying, in the knowledge that a successful outcome will allow them to recover most of their costs, and that damages will not be reduced by the law firm’s success fee.
Litigation insurance is hugely valuable to law firms and clients where none of the law firm’s fees are at risk. In the event that the case is unsuccessful, the client will have hedged the risk of paying the other side’s costs and will not be in the position of having funded their own costs and picking up the other side’s bill.
If the client is successful, own costs are recoverable and the premium becomes due. All Temple’s commercial premiums are deferred until the outcome of the case and contingent on success; they are also not cumulative.
Many cases funded by traditional retainers involve corporates and publicly listed companies. Their decision to hedge the risk of losing shifts the costs risk from their balance sheet to the insurer.
For example:
- Bloggs Designs Limited (“BD”) has a commercial agency dispute with XYZ098 (t/a Shoreditch City) Ltd (“SC”), and is seeking damages of £800,000.
- BD approaches a law firm that advises on the retainer options available, and opts for an hourly retainer, where the law firm raises a monthly invoice for work done.
- This gives BD more certainty as to the fees it will pay, and the safety of knowing that if its case is successful, it will not lose a proportion of its damages to a success fee.
- BD also obtains ATE insurance with Temple Legal Protection Ltd. This puts the risk of paying SC’s costs onto Temple and off the company’s balance sheet.
- BD will only pay a premium for the insurance in the event that the case is successful.
- Meanwhile, the law firm knows that it will receive monthly payment for all work done the dispute BD has with SC, and that payment of its fees will not be subject to the case being successful or prolonged detailed assessment proceedings.
Whilst Temple has strong relationships with law firms that accept instructions on contingency fee arrangements, our commercial underwriters regularly insure cases funded by traditional retainers and the absence of a firm taking risks with its fees has no adverse effect on our ability to support a case. In addition, our risk assessments are completed in-house and there is usually no requirement to obtain counsel’s advice before submitting a case to us. There is also no assessment fee.
To obtain Litigation insurance and disbursement funding for a commercial case, our underwriters look for good prospects of success (at least 60%).
Have you got a good case on a traditional retainer? Please contact our commercial underwriting team by phone on 01483 577877 or by email – david.chase@temple-legal.co.uk
