The legal costs of bringing a contested probate claim against an estate can be daunting for potential claimants.
Our team of contested probate solicitors understand that sometimes finding funds in order to pursue a case can be daunting. Such claims, particularly claims under the Inheritance (Provision for Family and Dependants Act) 1975, are usually brought by persons who have limited financial resources.
We can advise regarding the following potential funding options in these circumstances:
Litigation Loans
A loan is provided by a specialist lender to fund the client’s legal costs. Various conditions have to be met with regarding the prospects of the claim being successful and the value of the claim. Funds are paid directly to the solicitor and are drawn down as required throughout the case. The loan (plus interest) is repaid from any proceeds received when the claim settles.
The loan is either secured against a property which the borrower owns or, where adequate security is not available, the loan company buys insurance to cover the repayment if the borrower is unable to do so and the costs of the insurance are added to the loan.
Interest will be charged on the loan which is payable when the loan is repaid. There is also an administration fee to pay.
Credit checks will be undertaken by the loan company.
A payment will have to be made by the borrower upfront for the initial legal advice regarding the funding options and for a barrister’s opinion to be provided to the loan company on the prospects of success which must be at least 60%.
The loan company must be kept updated regarding the claim and if the prospects of success change they must be informed and they may stop funding if the prospects reduce. The company will review the case if it does not settle and usually will require a further barrister’s opinion before agreeing to fund the case to a trial.
The loan remains repayable if the claim is not successful.
Conditional Fee Agreement (CFA)
Where recovery of substantial sums is very likely it may be possible to enter into a CFA. This is commonly known as a “no win no fee agreement”. Under a CFA the client’s legal costs are not paid as the matter progresses, the legal costs plus a success fee will be paid by the client from the proceeds received if the person succeeds with the claim.
A risk assessment will be undertaken to establish whether a CFA will be offered. The success fee charged can be up to 100% of the legal costs.
If the claim is lost the client’s own legal costs are not payable but disbursements (e.g. court fees, experts fees) and barristers’ fees are likely to be payable by the client and the client may have to pay the other party’s costs.
A successful party is normally entitled to recovery of their legal costs from the losing party. A policy of insurance can be taken out to cover the other party’s legal costs in the event of an unsuccessful claim and payment of the insurance policy premium can on occasion be deferred until the conclusion of the claim.
Deferred Fees
In limited circumstances, where a form of security is available, usually a charge over property, it may be possible to defer fees until the conclusion of a case. This would incur an increase in hourly rates to compensate for delayed payment. Disbursements and barristers’ fees will be payable.
The fees remain repayable if the claim is not successful.
