Glossary of terms
Our guide to funding-related terminology you need to know
After the Event Insurance (ATE)
Insurance purchased after a legal dispute has arisen to cover (usually) the risk of paying the counter-party’s legal costs in the event of a loss
Alternate Fee Agreement (AFA)
A billing method used by law firms and clients as an alternative to the traditional hourly billing model
Conditional Fee Agreement (CFA)
An agreement between a lawyer and a client where the lawyer’s fees or a portion of the lawyer’s fees are payable only in specified circumstances, usually a win – hence commonly known as no win, no fee agreements. CFAs often include a ratcheted success fee mechanism.
Damages-Based Agreement (DBA)
A contingency fee agreement where the lawyer’s fee is a percentage of the damages recovered by the litigant
Funding Agreement
A contract between a litigation funder and a litigant or law firm detailing the terms and conditions under which the funder will provide financial support for the litigation
Hybrid DBAs
A fee agreement that combines a DBA and another fee structure
Litigation Funding
The provision of financial resources by a third party to a litigant or law firm to cover legal costs and expenses usually in exchange for a portion of the proceeds from the lawsuit or a multiple of investment if successful
Portfolio Funding
Financing provided for a group of cases, rather than a single case, to spread risk and increase the attractiveness of the investment
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