Commercial Litigation Funding
Case Studies

Case Studies

The following are real-life examples of our work in securing litigtaion funding and insurance:

Case Study 1: Dresdner Kleinwort Limited & Anor v Attrill & Ors [2013] EWCA Civ 394

TheJudge received instructions from two city law firms acting for 104 ex-bankers involved in a €52m High Court claim, for wrongful breach of express and implied terms of their employment.

The opponent had taken an aggressive response to defending the claims and incurred significant legal fees with a magic circle law firm.  

The law firms involved agreed to a partial conditional fee arrangement with the claimants. However, the arrangement left the clients liable to pay disbursements such as significant experts’ fees and a sizeable proportion of their lawyers’ fees.  In addition, the claimants were potentially at risk for adverse costs; as it later transpired, these costs were substantial as the defendants were determined to take the case to trial and later on to the Court of Appeal.  

The claimants engaged TheJudge to explore their funding options.  The ex-banker clients were financially liquid and determined to maximise their damages recovery, therefore it was immediately apparent to our experienced brokers that a litigation insurance option (rather than third party funding) was the most economic choice.  We successfully arranged over £7m of ATE insurance with a syndicate of insurers to cover not only the adverse cost exposure but crucially also the clients’ own lawyers’ fees and disbursements. This meant that, while the clients paid their lawyers’ the 'non-CFA' fees and disbursements on an on-going basis, ATE insurers would reimburse the fees and expenses the clients had incurred, should the case lose or an insufficient recovery be received.    

The ATE premium was fully deferred and contingent upon success, meaning the clients were only liable to pay the premium in the event that the case succeeded, which ultimately it did both at the High Court and later in the Court of Appeal.

Case Study 2:  Combining Funding and Insurance

TheJudge was engaged to explore the litigation funding options available to a client involved in a dispute following the creation of an investment fund. The client alleged that he had been deprived of his member’s interest in the LLP and it was clear that the opponents were refusing to engage in meaningful discussions about the claim.

The potential value of the claim was uncertain and the client had limited resources available to fund the litigation. The client was also likely to face a security for costs application as he was domiciled outside of the UK. The client therefore required a funding solution to finance the case generally and provide security for costs. However, it was crucial that such a deal was structured on as cost-effective terms as possible; given the uncertainty over the potential recovery, the client understandably wanted to maximise his net return as much as possible.

The law firm agreed to act on a discounted CFA and also agreed to defer payment of a proportion of the unconditional element of its fees. TheJudge arranged an insurance policy covering the deferred (but unconditional or 'non-CFA') own lawyer's fees, as well as providing an indemnity for adverse costs, with the option to purchase a security for costs bond at a cheaper rate than typical litigation funding rates, if required. The insurance premium was deferred to the end of the case and conditional upon success.

TheJudge also arranged third party funding to finance the balance of the law firm’s fees and disbursements, again at cost-effective rates.

The overall arrangement provided a complete funding solution at a highly competitive cost.

Case Study 3: Professional Negligence Dispute

A well-known regional law firm approached TheJudge with this matter on behalf of their client, a medical professional, who intended to pursue a negligence claim against his former lawyers.

His former lawyers acted for him in the purchase of a business and the lease of the premises from which the business operated. At the point of agreeing the lease, an option to purchase the freehold was included (as agreed between the parties) however the lawyers failed to advise the claimant of the need to take certain steps within a specific time period in order to protect that option. This resulted in the claimant losing the option to purchase the lease and the value of the claim against his former lawyers was said to be in excess of £200,000.

The claimant’s new lawyers agreed to act under a CFA, taking 100% of the risk on their fees. However, the claimant remained liable for counsel’s fees, other disbursements and of course the potential adverse costs risk.

TheJudge negotiated with the markets and presented four insurance options and one funding option to the client. After discussing these options in detail with his broker at TheJudge, the client decided to proceed with insurance only, as it complemented his desire to hedge risk but to receive as high a proportion of his damages recovery as possible.

The insurance provided £90,000 of cover in respect of adverse costs and own disbursements, meaning the client would be reimbursed by the insurer for any disbursements paid if the case was unsuccessful, in addition to paying the other side’s costs.

The premium payable in return for this insurance was deferred and contingent, meaning the client would only make payment of the same in the event that he was successful in the litigation. The premium was also discounted by over 90% should the case settle as opposed to proceeding to court. The case remains on-going.