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What is Litigation Funding?
Litigation funding is an arrangement whereby a third party agrees to pay all or part of a claimant's legal fees in return for an agreed proportion of the resultant settlement or award of damages.
Who are Augusta Securities?
Augusta Securities Limited is a Jersey-based finance company that specialises in litigation funding. It has allocated a sum of money to your solicitor’s Law Firm in order that they may offer a financing solution to clients with sound commercial claims.
How does the Augusta solution differ from other funding models?
The Augusta model is based on a strong working relationship with the law firm putting the case forward. The relationship means that the financing decision is given quickly. If you are successful in securing financing you will also qualify for After The Event insurance with the option to hedge the majority of your contribution to the matter. In summary, the Augusta model leaves you the claimant with the largest portion of any award or settlement.
What is After The Event Insurance?
After The Event (ATE) insurance is an insurance policy taken out after a dispute has arisen to protect a claimant against the risk of having to pay the opponent's legal costs if you lose. The policy, which comes as standard with the Augusta financing solution, also allows you, to protect 90% of your financial contribution to your case should you choose this option.
Who will provide the insurance cover?
Amtrust Europe Limited will be the insurer. AmTrust Europe Limited is a member of the Association of British Insurers and is authorised and regulated by the FSA (FSA firm reference number 202189).
Am I obliged to take out cover with Amtrust or can I approach another insurer?
You are not obliged to take out the insurance policy with Amtrust. If you would like to arrange your own insurance cover, or ask our insurance broker Universal Legal Protection (ULP) to arrange an alternative insurance policy, you are free to do so. However, we believe that ULP has been able to utilise significant buying power to obtain a very competitive price that is unlikely to be matched if an individual client seeks the same level of cover with Amtrust or another insurer.
What sort of cases are suitable for funding by Augusta?
Your solicitor will discuss the Augusta criteria with you, but in general terms a suitable case will be one with good legal merit and where a monetary outcome is sought from a defendant with a clear ability to pay. Personal Injury, medical negligence, defendant and matrimonial matters are not considered.
Is there a minimum case value Augusta will consider?
No. The unique way in which Augusta calculates the economics of a case means that cases of virtually any size can qualify for funding. Provided the claim makes commercial sense for all parties, and meets the Augusta criteria, it will be funded.
Am I required to make a financial contribution to my lawyer's fees?
In most circumstances the answer is yes. We also expect your solicitor to undertake a partial conditional fee arrangement (CFA see below), which means that they apply a discount to their normal fees. It is important that everyone (claimant, lawyer and funder) makes a financial contribution to ensure that only strong claims with realistic prospects of success are pursued. There is, however, a mechanism whereby you can protect 90% of your contribution to your case - your solicitor can provide further details of this.
What is a partial Conditional Fee Agreement (CFA)?
A CFA is an agreement that allow a lawyer to charge a discounted hourly rate in return for a ‘success fee or percentage uplift ‘ on their nominal charges in specified circumstances, e.g. if the claim or part of a claim is successful at trial or if an early settlement is reached.
As an example, if your lawyer agrees to discount their fees by 40%, it means that whilst your case is being conducted, your lawyer will be paid 60% of their agreed costs. If an acceptable settlement offer is received or the matter wins at trial, your lawyer will be entitled to the balance owing i.e. the remaining 40% plus an agreed uplift or success fee calculated as a percentage of their costs.
A settlement offer is received and accepted for £500,000
The law firm has previously agreed to discount their fees by 40%
At the point at which the settlement offer is received the firm has been paid £60,000 in fees.
Therefore, out of £500,000 settlement received:
a) The firm receives the balance of the fees owing at the point of settlement = £40,000; plus
b) An agreed uplift of 40% calculated on the fees incurred of £100,000 = £40,000
Total sums due to firm a) + b) = £80,000
Balance due claimant = £420,000
If my case loses do I have any financial liability to Augusta or to my opponent?
No. Augusta provides funding on a non-recourse basis, which means that if your case loses you have no liability to Augusta. In addition, all claimants availing themselves of the Augusta funding solution are required to take out After The Event (ATE) insurance which protects them from the requirement to pay the other side's costs in the event of a loss.
Does Augusta have the right to require me to make or accept a settlement offer?
No. Whether or not to settle is your decision alone. However, Augusta will expect you to behave reasonably and will require you to take advice from your solicitors and / or counsel on whether settlement is appropriate.
Do I need to have Counsel's Opinion before Augusta agrees to fund a matter?
Ideally yes. In larger matters it is important to have an independent view on both the merits of a claim and the proportionality of the damages sought. If, however, your solicitor has not already obtained Counsel's Opinion, Augusta will still consider your matter for funding. If it is deemed suitable, we may make an offer of funding contingent on your solicitor obtaining Counsel's Opinion supporting the merits of the claim, or we may deem the matter strong enough to approve the matter without Counsel’s Opinion. The cost of any Counsel Opinion required as a pre-condition of funding will be reimbursed if Augusta move forward and fund your case.
To what extent does Augusta have a right to control the case after funding commences?
Where Augusta provides funding, we require that your solicitors provide us with regular updates on the progress of the litigation; Augusta does not seek any right to control the litigation beyond monitoring its on-going investment.
How long does the application process take?
Because your solicitor has been approved to offer the Augusta Funding Solution to its clients, the application process is much swifter and more straightforward than traditional third party funding models. Once you have agreed the commercial arrangements with your solicitor, your solicitor will complete and submit a Funding Application together with an agreed budget for your case. The matter will be considered by our review panel that meets regularly. If successful we will make an offer of funding and ULP will make an offer to provide an ATE policy for your case.
Will Augusta pay for costs I have already incurred?
If the costs incurred are directly related to the case and do not skew the economics of the financing solution, Augusta will pay these previous costs. Where the costs incurred to date are substantial when compared with the overall costs of the matter, Augusta may choose to finance only a portion of these.
How do I find out more about the Augusta Funding Solution?
Your solicitor has all the information required to make an application for funding on your behalf.