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
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
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 Agreements, Damages
Based Agreements and third party
• 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.