Alternative Funding

In certain circumstances your case might be eligible for alternative methods of funding. Set out below are the potential sources of funding and funding options that could be available.  

Please note it may not be possible or suitable for your matter to be funded as you wish, but as a matter of client care we try to keep clients informed of all their possible funding options.    

Damages Based Agreement (“DBA”)

A DBA is a type of contingency fee: a ‘no-win, no-fee’ arrangement under which the successful claimant's representative takes a percentage of their client's compensation or settlement monies as their fee. In the event of a loss, the representative is generally not entitled to be paid. Subject to a full review of your case, it may be possible for us to enter into such an arrangement with you to fund your claim by way of a percentage of any damages or benefit achieved in your claim, including any sums that may be paid under the terms of any settlement agreement. Experience suggests that few cases are suitable for this method of funding.

Conditional Fee Agreement (“CFA”)

A CFA is an arrangement that provides that you pay either no fee or a discounted fee in the event that you do not win the dispute, but an enhanced fee in the event of a win or settlement. Under a CFA we charge the standard hourly rate plus a success fee, payable in the event of a win, which is a percentage mark-up on those standard hourly rates. That percentage mark-up is based on an assessment of the risk of losing the case. In the event of a loss, we receive no fee, albeit there may be external disbursements such as Counsels fees for you to pay unless Counsel also agrees to enter into a CFA. Alternatively where it is appropriate, we can agree to charge a discounted hourly rate, payable regardless of the outcome, with the balance of the hourly rate and a success fee payable in the event of a win.

Legal Expenses Insurance Cover (“LEI”)

LEI is often included as part of a household or motor insurance policy.   It usually covers legal fees and disbursements incurred up to a specified limit when bringing an employment claim. Many policies attempt to impose various limitations on the type of work that is covered and the hourly rates that can be charged. However, it may still be a valuable asset for an employee client wishing to bring a claim. This type of legal expenses insurance, taken out before a dispute arises, is known as before the event (BTE) insurance. BTE is also available to employers to expressly cover their legal costs for employment disputes.

You should consider whether you have any legal expenses insurance available under a household or motor insurance policy. Please check any such policies carefully for details of legal expenses insurance available to you. If this is the case you will need to notify your insurers immediately in order to not jeopardise any potential cover. 

It is common for legal expenses insurers to attempt to require you to instruct one of their own panel firms. However, regulation 6 of the Insurance Companies (Legal Expenses Insurance) Regulations 1990 provides that the insured client should be free to choose their own legal representative.

After the Event Insurance (“ATE”)

After the event (ATE) insurance is a form of legal expenses cover taken out after the event to which the claim relates has occurred but generally before Court or Tribunal proceedings are commenced. ATE covers a party's potential liability in the event of losing their case, in respect of their own disbursements and their opponent's costs and disbursements. It is of limited application in Employment Tribunal cases because costs awards are rare and the risk of the Tribunal ordering a party to pay their opponent's costs is therefore minimal. In any event, ATE policies are of limited relevance in Employment Tribunal cases and Premiums for ATE are generally disproportionately expensive.

Agreed Fixed Fee with Dutton Gregory

It may be possible in certain cases for us to agree with clients a fixed fee service whereby no matter how much work is carried out on a case a defined fee will be agreed, at the outset. Such an agreed fee would only cover the costs for the work carried out by us and would not include any other disbursements such as Counsels fees or experts costs.

Public funding / Community Legal Service (previously Legal Aid)

Public funding in Employment Tribunal cases is extremely limited and has been of diminishing assistance to those wishing to pursue an employment claim for many years. Funding is only available to those in receipt of certain state benefits, or who meet the means test criteria. The limited funding for advice and assistance in preparing or settling a case, does not extend to representation before an Employment Tribunal. In addition, public funding for employment matters is now limited to claims under the Equality Act 2010 and then only to those who meet the eligibility criteria. At present we do not have a franchise in place to enable us to carry out legally aided work in the Employment Department.

Pro bono representation

There are some charitable organisations who offer free legal assistance to claimants who meet certain requirements. For further details contact the Law Society for a list of organisations. It is important to check that such organisations are genuine and not just attempting to attract work which they then seek to carry out on a CFA or DBA basis. Currently this firm does not offer stand alone Pro Bono work.

Trade union representation

In certain circumstances your legal costs may be covered if you are a member of a Trade Union. If this is the case please check the terms of your membership. Trade Unions typically provide legal advice and support to their employee members, often for no charge, depending on the nature of the dispute. However, Trade Union funding may be restricted to certain types or classes of dispute and there may be costs attached to the provision of funding.

Equality and Human Rights Commission

Funding for discrimination claims may be available from the Equality and Human Rights Commission (EHRC) in limited circumstances. The EHRC has its own funding criteria which vary from time to time. Typically, cases will need to set a precedent for the greater benefit of particular classes of employees before they can attract support from the EHRC.

The above list is only intended to be guide to the potential available sources of funding for employment matters. It may not be possible for us to offer these funding options in every case but you should be aware that there may be other firms or organisations which may be able to offer these arrangements.