Third Party Funding Arrangement

Going to Court or engaging a solicitor for any work is expensive.  The legal justice system is full of expensive institutions, individuals, firms and companies which are costly to use or engage, even though they mainly exist to support personal freedoms and rights.

In recent years access to justice has become even more difficult, with Legal Aid now very difficult to access in the UK and, without funding, it is almost impossible to impose or rely on legal rights provided by the law.

The result of this is that there is a huge imbalance between those with money, who can instruct lawyers with the appropriate expertise and will almost always be in a better position, and those with little resources who, despite often having a stronger claim or interest, will undoubtedly suffer in the absence of obtaining proper legal advice.

The imbalance in the legal system has in recent years lead to Parliament relaxing historic Victorian laws which prohibited third parties getting involved in such proceedings solely for business purposes (often referred to as “champerty and maintenance”, which at one time could lead to a prison sentence).  Nowadays, times have changed and any arrangement which does not prejudice to principles of justice and do not overly prejudice any other party will be permissible if it assists in facilitating access to justice.

Third Party Funders

Third Party Funders, as they are generally known, comprising funding institutions set-up in recent years to provide access to finance mainly for the purpose of issuing claims, but which can also extend to the defence of claims and even out of Court non-contentious negotiations where legal assistance is required to be funded.

These funders tend to be supported by investors and will work in a similar way to any private funding institution, the main purpose of the funding being for the Third Party Funders to obtain a profitable return on their investment.

Third Party Funders will offer all of or one of the following arrangements to fund your claim (or defence):

  • a. Funding Models – the precise model will depend on your needs and funding requirements.
  • b. Solicitor Funding – this can be a combination of an arrangement directly with your Solicitor or a funding arrangement entered into between the Third Party Funder and the nominated or instructed solicitor.
  • c. Bridging Finance – this is a straightforward finance arrangement provided by a Third Party Funder who specialises in such products.For more details see here.
  • d. Assignment of Claim – this is a mechanism whereby, for a fee, your claim can be assigned in part or in whole, with potentially a right to retain a portion of any end recovery.
  • e. After The Event Insurance – this is insurance that is accessible directly, via brokers or introduced as part of a Third Party funding arrangement.This insurance can enable you to issue or defend contested litigation proceedings whilst being insured against your opponent’s legal costs (which may be sought against you if you are unsuccessful).For more information please see here.
  • f. Damages Based Agreement Insurance – this is an insurance provided to your solicitor to comfort them that the risk they take is insured against, should they agree to enter into a Damages Based Agreement. For more information click here.


At Francis Wilks & Jones we are fully aware of the full scope of possibilities for making your claim pay the cost of any legal advice sought and often work on projects together with Third party litigation funders and can assist in explaining some of these terms and introducing a funder who may be prepared to fund any legal clam you have.

Please note that we are not authorised to conduct investment business or authorised to provide any advice on any such financial products, which would be a matter for your agreement with the Third Party Funder.  

Please call any member of our commercial litigation team for your consultation now on 020 7841 0390.  Alternatively e mail us with your enquiry and we will call you back at a time convenient to you.