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Contingency Fee Insurance
Protection for contingent fee entitlements across matters.
- A judgment or award won
- A judgment against you
- Funder capital deployed
- Law firm fees and WIPThis cover
- Security for costs
- The opponent's costs
- Disbursements
- Own legal costs
Illustrative. The exposures a dispute can put on a balance sheet. What a policy responds to is set by its wording.
What is Contingency Fee Insurance?
Contingency Fee Insurance is a form of litigation risk transfer that may be arranged around contingent fee receivables. Protection for contingent fee entitlements across matters. Terms, where available, are set case by case through underwriting.
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Schedule · specimen
Contingency Fee Insurance
Not a policy. A specimen to show how this cover is structured. Cover exists only when a policy is issued, on its own wording.
- Terms
- Terms, where available, are set case by case through underwriting.
- Protects
- Contingent fee receivables, depending on policy terms.
- Terms
- Limit, premium and conditions are set by underwriting on the specific risk.
Clause 1
The insured
Who it is for
Firms — particularly in the United States and in arbitration practices elsewhere — whose fees are contingent on recovery.
Clause 2
Insuring clause
What risks can be protected
The firm's contingent fee receivables, or the time invested in them, across one or more matters.
Clause 3
Operation of cover
How it works
The insurer assesses the matter or book and protects an agreed value of the firm's contingent receivable if cases fail.
That can support lending against the book and let the firm take on larger matters.
Clause 4
Underwriting
Underwriting factors
The core assessment is the same as for Law Firm Litigation Insurance: merits, quantum, a proportionate budget, recoverability and the legal team.
The points that weigh most for this cover are set out under "What risks can be protected" and "How it works" above.
Clause 5
Proposal documents
Information required
The standard presentation pack described on the Law Firm Litigation Insurance page, plus the documents specific to this cover noted above.
Clause 6
Limit, premium and staging
Potential structure
- (a)Per-matter or portfolio limits;
- (b)Attachment after an agreed level of loss; and
- (c)Contingent premiums.
Clause 7
Alternatives
Alternatives
- (a)Law firm portfolio lending;
- (b)Co-counsel fee sharing; and
- (c)Referral arrangements.
Clause 8
Territory
Jurisdiction notes
Forum rules apply as described on the Law Firm Litigation Insurance page; the jurisdiction guides linked below set out the position forum by forum.
Specimen for explanation only. Terms, limits and exclusions are set by underwriting on each matter and by the wording issued.
Frequently asked
Are contingency fees allowed everywhere?
No. They are widely used in the United States, restricted or regulated in England and Wales (through CFAs and DBAs), and limited in several other forums, though some permit outcome-related fees in arbitration.
How does contingency fee insurance help a law firm?
By protecting part of the value of its contingent receivables, it can support lending against the firm's book and let it take on larger matters.
Is Contingency Fee Insurance available for my dispute?
Availability depends on the merits, the quantum, the costs profile and the counterparty. Every risk is assessed individually and no cover exists until a policy is issued.
Does this quote a price?
No. Pricing is a function of the specific risk and is never quoted in the abstract. Nothing on this page indicates the cost or availability of cover.
Can it be combined with litigation funding?
Frequently, yes. Funding supplies capital; insurance defines the downside. The two are often structured together.
General information only. This page is not legal, financial, investment or insurance advice. Any insurance is subject to underwriting and to the terms of the policy wording issued.
Where to go next
Jurisdictions