There are only two circumstances where we may seek to charge an application fee prior to accepting an engagement.
We are paid by whichever insurer or funder our client ultimately accepts an agreement with, which will usually be from whichever option proves to be the most competitive offer for the client.
This means our remuneration is contingent upon our sourcing the funding/insurance but is also typically contingent upon the case proving successful i.e. since the funders and insurers are usually only paid if the case succeeds, so too is our commission.
Because we do not charge any application fee to the client we need to ensure we have a clear run to approach whichever insurers or funders we believe are most suitable for the case in question. Were clients to pick and choose which markets they approach directly, our team could end up doing significant work without a return.
Similarly, where a case has already been rejected by a funder/insurer and is then later presented to us, the chances of securing offers can diminish i.e. because any subsequent funders/insurers will want to know if the case has already been rejected elsewhere.
Remuneration aside, it can become incredibly cumbersome for engaged lawyers to deal with the various responses coming from different directions and can often lead to duplication and therefore cost. For this reason we prefer to manage the whole process and ensure a streamlined and organised approach.
Occasionally a case can be presented to us where we simply believe the likelihood of securing offers of litigation funding or ATE insurance are remote.
It could be because the case is uneconomic for funding, it has already been rejected elsewhere or perhaps it’s simply a case we know from experience is unlikely to be of appeal to our funding and insurer markets.
However, if notwithstanding our advice the client still wishes to make the application, then we can do so but only on the basis of agreeing a reasonable application fee.
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