Litigation Funding in Employment Law

Caragh Bailey
13/08/2021
7
3 min read
Litigation Funding from Employment Law Friend

What is meant by litigation funding?

When you have a legal dispute, one of your main worries is going to be: How much will it cost? Can I afford it? How will I pay for it? Litigation funding covers a number of different options. The most common type of litigation funding for employment disputes are Damages Based Agreements or DBA’s.

How do litigation funds work?

A DBA is a contingency-fee agreement, most commonly known as a “no-win no-fee” agreement. The solicitor will be paid based on the outcome of the case, and it is calculated based on the compensation the client recovers from the other side.

In practice, where a DBA has been agreed to, your solicitor will take a share of the damages if you’ve been successful in our case. If you’re not successful, your solicitor will not be paid.

The DBA Regulations set out how DBA’s work in practice.

If the client wins, the solicitor will receive a percentage of the client’s winnings, which is capped at 35%, and if the client loses the solicitor receives nothing.

What costs can the claimant receive from the losing defendant?
If the claimant has entered into a DBA there is an exception as to the costs they can recover from the otherside, which is that they may not recover more of their costs than the total amount that is payable to the solicitor under the DBA.

Do you need to tell anyone that you have a DBA?
No. You do not need to disclose it to anyone, however, sometimes it can convince the other side to settle since it shows them that your solicitor thinks the case is likely to win.

Frequently Asked Questions
Litigation funding companies exist to make justice more accessible to all. They have large amounts of money which they spend on litigation for parties who do not have the cash themselves. The litigation company takes a share of any winnings that are awarded to the party they have funded. Essentially, they make a bet on the strength of your case. If you win, they get some money, if you lose, they lose their money.

Do you have a problem with your employer?
There is much more to winning your case than simply being in the right, our specialist employment solicitors know all the laws and tactics, to make sure you get the best chance at a fair settlement. Get in contact with us and see how we can help.

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This content is provided free of charge for information purposes only. It does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of our company. For employment law advice you can click here to organise a meeting with one of our panel of employment law solicitors.

 
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