Fox Williams LLP is now able to offer a new type of litigation funding.
Available for commercial contract disputes, our agreement with the funder has extended the funding to certain (but not all) claims made by agents under the Commercial Agents Regulations and claims made by distributors for breaches of distributorship agreements.
This new type of funding has the following key features:
- This new funding is available for cases where the amount claimed by the agent or the distributor is a few hundred thousand pounds to low millions rather than amounts in excess of £5m.
- The claimant agent or distributor usually pays only about 20% of its total legal fees, and has the option to insure 90% of its 20% contribution, so if the case is lost the agent or the distributor pays only about 2% of its overall costs.
- The agent or the distributor is insured against the risk of paying the costs of the principal or supplier. This insurance is at an extremely competitive rate, which is much cheaper than is generally available in the market.
- Fox Williams LLP acts on the basis of a partial Conditional Fee Agreement, investing part of its normal fees in a successful outcome to the case.
- The funder funds the balance of the litigation costs, including all barrister’s and expert's fees, other disbursements, and the insurance premium.
- If the case is lost, the insurer pays the costs of the principal or supplier (not the agent or the distributor), and the agent or the distributor pays no more than the agreed 20% (or 2%) of its own costs – there is no further liability.
- If the case is won, the funder and Fox Williams LLP are paid success fees from the winnings.
- However, the funder takes a smaller success fee than traditional litigation funders, which leaves more of the winnings for the agent or the distributor.
Over the last few years the litigation funding market has been expanding. As a result increasing numbers of commercial cases are now funded wholly or partly by third party funders, who invest in others’ litigation. The obvious benefits for the agent or distributor are that:
- The agent or the distributor pays very little or virtually nothing of its own legal fees if the case is lost.
- The agent or the distributor does not take the risk of having to pay the fees of the principal or supplier if the case is lost.
- This enables an agent or distributor with a meritorious claim to bring the case even if the agent or the distributor is unable to afford to pay its legal fees or to take the risk of paying those of the principal or supplier.
- Even for an agent or distributor who can afford to pay, funding a case using a litigation funder can enable the agent or distributor to hedge its litigation risks.
If you would like to know more about this new type of funding, or indeed have any questions about litigation funding generally, please contact Tom Custance or Stephen Sidkin.