Don't invest unless you're prepared to lose all the money you invest. This is a high - risk investment and you are unlikely to be protected if something goes wrong. Take 2 mins to learn more
Don’t invest unless you’re prepared to lose all the money you invest. This is a high - risk investment and you are unlikely to be protected if something goes wrong. Take 2 mins to learn more
First-time claimants often find that protecting their legal rights can be daunting. They have limited understanding of the process. By its very nature, litigation creates uncertainty and stress. The first step for any inexperienced claimant should be to appoint a litigation consultant. In our experience incentives matter, even when dealing with highly professional people (lawyers, litigation funders, insurers and brokers alike). Having a capable consultant in place at the outset who is exactly aligned with the claimant increases the likelihood of a good outcome for the claimant (although this is still, of course, not a guarantee of success).
Selecting a solicitor:
Frequently claimants find themselves having to make key decisions with limited information. Perhaps the most important decision is choosing their solicitor. A claimant's urgent need for good litigation advice may lead them to select a solicitor without a rigorous process. Having a litigation consultant in place before selecting lawyers is generally likely to produce a better outcome. In our experience, the slight increase in overall costs due to the consultant is likely to be greatly outweighed by the improvement in strategy and team configuration.
Potential solicitor problems:
Granted, once a solicitor is in place, the claimant is benefitting from the advice of an experienced operator. However, there is a key conflict of interest. The solicitor's own fees are the fundamental expenditure of the claimant in the litigation. The solicitor typically advises the claimant in determining the optimum financing strategy to finance their case. However, one of the essential levers in that financial planning involve the solicitor themselves, in particular, the solicitor's hourly rate and whether any proportion of the solicitor's fees will be contingent on a successful outcome. Furthermore, key to the planning process is weighing the cost versus the benefit of selecting a more specialised solicitor and/or one more willing to work on a contingent basis vs. the cost solution being offered by the original solicitor. Understandably, a relatively expensive solicitor may be reluctant to advise his client that he should switch to a more cost-effective alternative solicitor. We will work with claimants and their solicitors, if appointed, to find the best cost/reward solution.
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Recommended sequence for claimant to assemble the litigation team
Appoint litigation consultant
Appoint ATE insurer
Appoint litigation funder
Advantage of a litigation consultant
We believe that before selecting their legal team, insurer or funder, claimants should get input from a litigation consultant who only gets paid a percentage of the net proceeds received by the claimant after all other expenses have been deducted from recoveries and therefore, is commercially aligned with the claimant.
On several occasions, AxiaFunder has seen cases that were unable to proceed because the solicitor running the case was too expensive, because for example they were not prepared to operate with a sufficiently high proportion of their fees being on a contingent basis, or where the claimant was continuing the litigation despite a relatively attractive settlement offer being on the table. A litigation consultant can often help claimants avoid these value-destroying outcomes.
AxiaFunder's potential conflict
Of course, AxiaFunder also has a potential conflict of interest since we provide funding! However, before AxiaFunder finances a case, we always require that a solicitor is engaged who can evaluate our financing proposals to make sure that they are competitive and produce a worthwhile result for the claimant.
Engage a litigation consultant
With a litigation consultant engaged, these checks and balances (against potential conflicts) give claimants the best chance of a good net outcome.