There are many risks involved in litigation. Some risks are unpredictable: such as how not knowing what documentation your opponent may have may affect the claim. Being aware of such risks is the limit of your control. The financial risks of any dispute are, however, a different matter: they can be identified and measured; they can be controlled.

The financial risk you face in any dispute is a combination of:

• the amount of your claim

• the amount of your opponent's claim, if there is one

• your legal team’s costs and expenses

• your opponent's legal costs and expenses

• market and time related financial risks of interest and exchange rates

If your claim is successful, you should recover the amount of your claim, interest, and around two-thirds of your own legal team’s costs and expenses (the balance of which you will have to pay). This is your best expected outcome.

If you lose your claim, you will have to pay your opponent’s claim (if there is one) and interest on that claim, plus around two-thirds of your opponent’s legal costs and expenses, as well as your own legal team’s costs and expenses. This is your worst expected outcome.

The total financial exposure you face in a dispute is the difference between your best expected outcome and your worst expected outcome. Addleshaw Goddard’s costs estimating tool will automatically produce this figure for you, based on our estimate of your own and your opponent’s legal costs and expenses.

It is this figure that is used as your starting point for identifying the level of your financial exposure and is the basis for considering whether or not some form of funding arrangement, under which some of this financial risk might be transferred to someone else, might be acceptable to you.