With so much choice in the market, finance directors can struggle to see the wood for the trees when looking for the right funding for their legal action. They would be forgiven for assuming litigation funding should be their first port of call when seeking greater certainty over their legal spend or to reduce the risk or cash drain associated with a dispute. But companies should not overlook the use of litigation insurance to complement or as an alternative to litigation funding. Insurance is available for own fees and disbursements as well as adverse costs and is usually the most cost-effective route to remove the litigation risk from a cost budget, where cash-flow is not the primary concern.
It is vital that all companies, large and small, understand the full breadth of the funding and insurance options available if they are to make informed decisions about which mechanism will meet their combined needs of removing the cost risks involved in the dispute and ensuring they retain the lion share of the damages. Unfortunately, not all businesses are receiving adequate advice from their legal advisors notwithstanding the broad principles set out within The SRA’s Code of Conduct that place a duty on solicitors to put their client in a position to make informed decisions about their fees.