Funding of insolvency litigation and investigations

When an insolvency office-holder is appointed over an insolvent estate, there is a need to commence litigation and there are no or limited assets in the estate the following matters will need to be carefully considered:

1. •

   how the costs of their lawyers (both solicitors and counsel) and any disbursements (such as court fees and expert reports) are going to be funded

2. •

   the likely requirement for security for costs to protect a defendant against the risk of successfully defending the litigation and being unable to recover their fees from the insolvent estate

3. •

   the payment of any adverse costs orders made against them and/or the insolvent estate if the litigation is unsuccessful

The above risks can be dealt with by a variety of litigation funding tools, including:

1. •

   conditional fee agreements

2. •

   damages-based agreements

3. •

   third party funding

4. •

   insolvency-specific funding methods

5. •

   after the event insurance