Funding arrangements

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The costs of litigation can be high and many litigants are unable (or unwilling) to pay for it out of their own resources. Litigation funding is a broad term which covers the various ways in which a party can obtain assistance with funding the costs of litigation. Examples include:

  1. •

    third party or commercial litigation funding agreements

  2. •

    retainer-based funding agreements

  3. •

    insurance policies such as before the event or after the event insurance (BTE and ATE insurance)

  4. •

    disbursement funding loans

This area underwent a fundamental change when the Jackson costs reforms came into force on 1 April 2013. The changes impacted practitioners’ strategic considerations when seeking to fund litigation. Transitional provisions apply to pre-commencement funding arrangements, as defined in CPR 48.2, and specific types of cases.

Obligation to discuss funding with clients

Solicitors have a responsibility to discuss funding options with their clients. The Solicitors Regulatory Authority (SRA) Codes of Conduct 2019 and the SRA Transparency Rules set out the requirements that solicitors must adhere to when discussing such arrangements with their client. See Practice Note: Information on costs—law firms.

It is important

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