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Professional Negligence

Did your Solicitor fail to advise you about litigation funding?

Solicitors are legally required to address litigation funding with their clients. If your solicitor fails to give you adequate advice you on litigation funding this could cause financial loss.


Failure to advise about litigation funding

Failure to give adequate advice about Litigation funding sometimes referred to has After The Event Insurance (ATE) which may have covered the cost of the failed litigation, is likely to be a breach of the Solicitors Code of Professional Conduct (1.2 outcomes). Solicitors are obliged to advise their clients that there is a risk of paying somebody else’s legal fees, they must explain the implications of the CFA (conditional fee agreement) and the option to purchase ATE insurance, consider whether the claimant has BTE insurance or even suggest third party funding – (indicative behavior rule 1.13 to 1.17 Solicitors Code of Conduct 2011).

The Solicitors Professional Conduct rules are seen as a minimum standard of what is an acceptable behaviour and requirement under the code of professional conduct.

If the solicitor fails to give funding advice, they may be negligent. If you have lost a case and/or received an adverse cost order and you are liable to pay, any claim made by the defendant for their legal costs against you, may be potentially recovered from the solicitor conducting the matter on your behalf. However you will only be able to recover those adverse costs from your previous solicitor if it can be shown that no efforts had been made to protect your costs position by providing you with sufficient and informed advice on litigation funding.

Rising cases of solicitors failing to advise about litigation funding

Solicitors are obliged to address litigation funding with their clients. The client is free to decline the advice and not proceed with an ATE insurance product or other alternative method of funding, even if that is the case the solicitor must give the client the option of purchasing the litigation funding.

However, recently there have been instances reported that some solicitors did not explain to their clients the need for litigation funding and the benefits it brings to funding litigation. Reasons for this may have been that the solicitors considered that the strength of the case was good or they might have been unaware generally that there were insurance products available to cover the risks, offering deferred (end of case) payment.

ATE insurance covers the other side’s (defendants) legal fees in the event that the client is unsuccessful with their claim. Solicitors generally act on a CFA (condition fee agreement)to fund the claimants own costs.

The consequences of not discussing litigation funding especially ATE insurance with clients, potentially means that if a claimant loses a case and is left with a large legal bill to pay personally, they may have a claim against their former solicitors for professional negligence. A claim may therefore arise if it can be shown that their former solicitors failed to advise that potentially the litigation cost risk could have been avoided by the purchase of an ATE insurance policy.

The claimant would have 6 years to bring a claim in negligence against their former solicitors however the time for bringing a claim can be complicated so we are happy to discuss this further with you.

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Failure to advise about litigation funding and loss of chance

It may also be a possibility that a potential claimant may have been deterred from bringing a claim at all. There may have been claims with reasonable prospects of success, but due to the advice provided by the solicitor that the claimant carried a substantial risk of being liable for costs if the claim was not successful, the claimant may have been deterred from pursuing. The solicitor in this instance may also have a professional duty to suggest that there may have been other firms which could have assisted to pursue the claim if they could not.

The claimant may have therefore lost their chance of pursuing the claim against the initial intended defendant due to the constraints of statutory limitation (the time limit to bring a claim).

This could also apply to a defendant wanting to counterclaim for damages and being advised that the cost risk was too substantial.

Recent commentary – is there a lesson to be learned?

Leading commenters have claimed that not all solicitors conducting litigation particularly in the field of commercial litigation have been actively advising their clients on funding cases. Although this is a developing area of litigation no case law on this subject as yet which would confirm either way whether the solicitors who have omitted this advice. It has been suggested that failure to provide sufficient advice on litigation funding is likely to be negligent, if the claimant can show the following:

  1. That they had a reasonable prospect of succeeding on the initial action (consideration must be given here that most cases involving litigation are likely to have a 51% chance of success);
  2. That they can evidence that the Solicitor did not discuss litigation funding or refer them to another firm which might have discussed such products;
  3. That they were left with an adverse cost order when unsuccessful, which they have paid or are going to have to pay;
  4. If the claimant lost their chance of pursuing the claim due to the failure of the Solicitor to advise about the options they may have a claim against the Solicitors if statutory limitation is passed.

We are here to help with your litigation funding negligence claim

If you have suffered a financial loss due to your former solicitors not providing any or insufficient advice on litigation funding which has resulted in a financial loss, we may be able to assist you to pursue a claim for professional negligence against your former solicitors to recover your financial losses.

We promise to listen and to be sensitive to your unpleasant experience. We also specialise in medical negligence claims, if you would like to discuss a medical negligence claim please do not hesitate to contact us.

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Start your professional negligence litigation funding claim with us today by arranging a free, no-obligation consultation with a member of our team.

Please call us on 0800 234 3234 or contact us and a member of our legal team will call you back.

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