Legal costs are an unavoidable part of the dispute resolution
process and often become a dominant issue as cases progress through
the courts.
Generally speaking, the losing party has to pay at least a
proportion of the winning party's legal costs. It's
therefore important, before embarking on litigation, to consider
how best to mitigate this risk.
Litigation funding and "after the event insurance"
(ATE) are two of the main products available which can offload the
risk of paying your opponents costs onto a third party.
The former generally involves a funder paying your legal costs
(and, if you lose, those of your opponent), in return for a share
of the proceeds if you win. By contrast, a party taking out an ATE
policy will normally have to pay a premium themselves, in return
for which the insurer will pay their opponents costs if they
lose.
