In our experience the prospect of possibly losing a case and having to pay an unknown amount of money to the other side is always a great worry for clients - however good we or they consider their case to be.

In legal aid cases this is not a problem. Your own costs are paid. As for the other side's costs, although an order is often made against you, it cannot be enforced without the court's permission. In practice you are safe. In any event, legally aided clients qualify for it precisely because they could not afford to pay their own costs, let alone costs of other parties.

Some people are able to litigate using legal expenses insurance that forms part of, for example, their household policy. It is always worth seeing whether you have such cover.

For those who are working out of their own funds - whether individuals or groups - it is however possible to take out insurance against losing. This has always been possible. However it is only recently, with Government policy changes relating to funding of legal services, and legal changes which came into effect on 1st April 2000, that insurance has become a more realistic option.

There are two types of insurance. One - "litigation insurance" - covers all your costs, that is your own costs and possible liability to the other party's or parties' costs, up to the limit of indemnity you purchase. The other - "Conditional Fee Agreement (CFA) insurance" - covers all your costs except your own solicitors' (ie. our) fees up to the limit of the indemnity purchased.

Litigation insurance is more expensive - typically, the premium is 20-40% of the sum insured. The premium for CFA insurance is around 15%.

Since April 1st, taking out any sort of insurance has become more attractive, because if you win the case you can recover the premium from the other side.

Doing CFAs has also become more attractive, because your solicitors can recover a "success fee" of up to 100% from the other side.

You can even insure against loss of the premium, though this has to be done as a separate add-on to the main insurance.

Which insurance you choose depends on a number of factors. CFA insurance, though cheaper, is not necessarily available. Among other reasons, it involves our agreeing to work for free unless we win, which we can only do in exceptional cases. It also depends what stage the case has reached. Litigation insurance, for example, will not cover your own costs prior to taking out the policy. There are also complicated rules relating to litigation which was in existence prior to 1st April 2000 that affects the equation.

The bottom line is that we recommend that you consider insurance in all cases. It makes people sleep better! We can supply proposal forms on request. Please note that the above is only a guide and each case requires individual consideration.