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Alternative Funding

In certain circumstances employees might be eligible for alternative methods of funding. Set out below are the potential sources of funding and funding options that could be available.  

Please note it may not be possible or suitable for your matter to be funded with Dutton Gregory Solicitors as you wish, but as a matter of client care Dutton Gregory seeks to keep clients informed of all their possible funding options.    

Damages Based Agreement (“DBA”)

A DBA is a type of contingency fee: a ‘no-win, no-fee’ arrangement under which the successful claimant's representative takes a percentage of their client's compensation or settlement monies as their fee.   In the event of a loss, the representative is generally not entitled to be paid. Subject to a full review and approval to enter such an arrangement, it may be possible for Dutton Gregory to enter into such an arrangement with you to fund your claim by way of a percentage of any damages or benefit achieved, including any sums that may be agreed to be paid under the terms of any settlement agreement.

Conditional Fee Agreement (“CFA”)

A CFA is an arrangement that provides that the client pays either no fee or a discounted fee in the event that they do not win the dispute, but an enhanced fee in the event of a win or settlement. Under a CFA Dutton Gregory charge the standard hourly rate plus a success fee, payable in the event of a win, which is a percentage mark-up on those standard hourly rates.   That percentage mark-up is based on an assessment of the risk of losing the case. In the event of a loss, Dutton Gregory receives no fee, albeit there may be external disbursements such as Counsels fees to pay unless Counsel also agrees to enter into a CFA. Alternatively where it is appropriate, Dutton Gregory can agree to charge a discounted hourly rate, payable regardless of the outcome, with the balance of the hourly rate and a success fee payable in the event of a win.

Legal Expenses Insurance Cover (“LEI”)

LEI is often included as part of a household or motor insurance policy.   It usually covers legal fees and disbursements incurred up to a specified limit when bringing an employment claim.   Many policies attempt to impose various limitations on the type of work that is covered and the hourly rates that can be charged. However, it may still be a valuable asset for an employee client wishing to bring a claim. This type of legal expenses insurance, taken out before a dispute arises, is known as before the event (BTE) insurance. BTE is also available to employers to expressly cover their legal costs for employment disputes.

You should consider whether you have any legal expenses insurance available under a household or motor insurance policy. Please check any such policies carefully for details of legal expenses insurance available to you. If this is the case you will need to notify your insurers immediately in order not to jeopardise any potential cover. Although obtaining costs in Employment Tribunals is rare, it is not possible to recover any of the success fees from the opponent even in the event ordinary costs are awarded.

It is common for legal expenses insurers to attempt to require you to instruct one of their own panel firms. However, regulation 6 of the Insurance Companies (Legal Expenses Insurance) Regulations 1990 provides that the insured client should be free to choose their own legal representative.

After the Event Insurance (“ATE”)

After the event (ATE) insurance is a form of legal expenses cover taken out after the event to which the claim relates has occurred but generally before Court or Tribunal proceedings are commenced. ATE covers a party's potential liability in the event of losing their case, in respect of their own disbursements and their opponent's costs and disbursements.   It is of limited application in Employment Tribunal cases because cost shifting is rare and the risk of the Tribunal ordering a party to pay their opponent's costs is therefore minimal.   In any event, ATE policies are of limited relevance in Employment Tribunal cases and Premiums for ATE are generally disproportionately expensive.

Agreed Fixed Fee with Dutton Gregory

It may be possible in certain cases for Dutton Gregory Solicitors to agree with clients a fixed fee service whereby no matter how much work is carried out on a case a defined fee will be agreed for the work at the outset.   Such an agreed fee would only cover the costs for the work carried out by Dutton Gregory and would not include any other disbursements such as Counsels fees or experts costs.

Public funding / Community Legal Service (previously Legal Aid)

Public funding in Employment Tribunal cases is limited to the Legal Help scheme and has been of limited assistance to those wishing to pursue an employment claim for many years. Funding is only available to those in receipt of certain state benefits, or who meet the means test criteria. The Legal Help scheme provides limited funding for advice and assistance in preparing or settling a case, but does not extend to representation before an Employment Tribunal (although funding for legal representation is, however, currently available for appeals to the Employment Appeals Tribunal (EAT) and beyond).   In addition public funding for employment matters is now limited to claims under the Equality Act 2010 and then only to those who meet the eligibility criteria.   At present this firm does not have a franchise in place to enable us to carry out legally aided work in the Employment Department.

Pro bono representation

There are some charitable organisations who offer free legal assistance to claimants who meet certain requirements. For further details contact the Law Society for a list of organisations.   It is important to check that such organisations are genuine and not just attempting to attract work which they then seek to carry out on a CFA or BDA basis. Currently this firm does not offer Pro Bono work.

Trade union representation

In certain circumstances your legal costs may be covered if you are a member of a Trade Union. If this is the case please check the terms of your membership.   Trade Unions typically provide legal advice and support to their employee members, often for no charge, depending on the nature of the dispute. However, Trade Union funding may be restricted to certain types or classes of dispute and there may be costs attached to the provision of funding.

Equality and Human Rights Commission

Funding for discrimination claims may be available from the Equality and Human Rights Commission (EHRC) in limited circumstances. The EHRC has its own funding criteria which vary from time to time.   Cases will usually need to set a precedent for the greater benefit of particular classes of employees before they can attract support from the EHRC.

The above list is only intended to be guide to the potential available sources of funding for employment matters.   It may not be possible for Dutton Gregory to offer these funding options in every case but you should be aware that there may be other firms or organisations which may be able to offer these arrangements.