what is third party funding ?

what is third party funding ?


Third Party Funding is an arrangement where a financier funds your solicitor’s fees (and all other disbursements) of a legal claim in exchange for either a share in the outcome or normal finance charges (i.e. interest).  Third Party Funding enables claims to be brought without immediately paying legal costs.

Going to Court, or any matter requiring legal advice and the instruction of a solicitor, is an expensive business.  Solicitors charge by the hour, will not be aware of your circumstances (and thus have to initially spend a lot of these costly hours reading into matters) and are not always guaranteed to provide you with a solution or value for your money.

Access to justice remains something of great importance in the UK, but with civil justice comes the cost of legal advice.  Assistance to pay such costs has diminished in recent years as a result of the lack of legal aid provided by the government for most cases.

In its place has been many attempts to legislate for certain types of arrangement to enable access to legal advice and assistance to be funded by the client’s strength of claim or defence.  Such attempts have included Conditional Fee AgreementsDamages Based Agreements and third party funding.


•    A conventional Bridging Finance deal with interest rates reflecting the risk the financier takes and any security provided (see our webpage that deals with Bridging Finance here; or
•    The acquisition or assignment of the claim

•    The funding of the legal costs of the claim directly, in return for a share of the damages via a Damages Based Agreement; OR
•    An alternative funding arrangement

Dependant on the arrangement, you may either continue to control the proceedings and instruct your solicitor, or alternatively the third party funder may be more in control (particularly when dealing with settlement) and for assignments may own and run the entire instruction of the solicitor.

Third party funding is a very useful way to obtain access to legal advice and assistance and pursue any claims you may have, where otherwise you may not have had any ability to instruct a solicitor to the desired level required.

Quite often, such agreements can provide that you retain an interest but this is dependent on the individual circumstances you face and the proposition that the third party is prepared to accept in exchange for its financial support.

Aug 7, 2019 18:04
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