USA Law and Practice Contributed by: Courtney Scobie, Jack Edwards and Andrea Whitley, Ajamie LLP
putes, contract breaches, IP, and antitrust mat- ters. These types of cases often turn to litigation funding to cover the substantial costs associated with the matters. Litigation funding is also seen in personal injury cases, class action lawsuits, employment and labour disputes, environmental litigation, and securities and investor claims. 2.3 Third-Party Funding for Plaintiff and Defendant Third-party funding is generally available both for plaintiffs and defendants in the USA, depending on the specific circumstances of the legal case. 2.4 Minimum and Maximum Amounts of Third-Party Funding Third-party funders in the USA do not typically have standardised minimum or maximum fund- ing amounts that apply universally. Instead, the funding terms – including the minimum and max- imum amounts – are determined on a case-by- case basis and can vary among different funding companies. 2.5 Types of Costs Considered Under Third-Party Funding Third-party funders in the USA typically consid- er funding various costs associated with legal proceedings. The specific costs that a funder may consider funding can vary based on the nature of the case and the terms negotiated with the parties involved. However, common costs that third-party funders may consider covering include attorney’s fees, expert witness fees, dis- covery costs, court costs, and mediation and arbitration expenses. 2.6 Contingency Fees Contingency fees are permitted in the USA, and they are a common fee arrangement in civil litiga- tion, particularly in personal injury cases. Contin- gency fees are generally allowed in civil cases in
the USA. This fee arrangement allows attorneys to represent clients without the client having to pay upfront legal fees. Instead, the attorney’s fee is contingent upon the successful outcome of the case. Some key features of contingency fee arrangements are as follows. • Percentage of recovery – in contingency fee arrangements, the attorney’s fee is typically calculated as a percentage of the monetary recovery obtained through settlement or judg- ment. • No win, no fee ‒ the defining feature of a contingency fee is that the attorney only gets paid if the case is successful. If the case is not successful, the attorney does not receive a fee, but the client may still be responsible for other case-related costs. • Costs and expenses ‒ in addition to the con- tingency fee, clients are generally responsible for reimbursing the attorney for case-related costs and expenses, such as filing fees, court costs, expert witness fees, and other out-of- pocket expenses. Attorneys who use contingency fees must adhere to ethical obligations to ensure that the fee arrangement is reasonable and fair to the cli- ent. This includes providing clear and transpar- ent fee agreements and keeping clients informed about the progress of the case. 2.7 Time Limit for Obtaining Third-Party Funding There are typically no strict time limits by which a party to litigation must obtain third-party fund- ing in the USA. It is advisable for parties to begin exploring their funding options early in the litiga- tion process to allow sufficient time for negotia- tions and to ensure that their financial needs are adequately met.
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