Project:
378 - Dispossessed
Description:
The group is exploring a Conditional Fee Agreement (CFA) supported by After-The-Event (ATE) insurance to pursue claims related to the Croyde Bay Holiday Club dispute. While this approach reduces upfront costs, success fees, ATE premiums, and disbursements could significantly reduce net recovery for members. Agreement terms, including withdrawal clauses, may inadvertently lock members into commitments, reducing flexibility during negotiations or settlements. Recent discussions highlight concerns about the impact of Mike Saltmarsh's bankruptcy on the value of the legal route, suggesting a need to consider alternative strategies, such as leveraging the group's connection to the property.
Desired Outcome:
Members have a litigation option that is financially transparent, proportionate, and aligned with member interests, with clear net-to-member expectations, strong protections against adverse costs, and no accidental lock-in that prevents individuals from accepting fair settlement offers.
What Could Go Wrong:
Net recovery to members could be heavily diluted by success fees, ATE premiums, and disbursements. Members might sign agreements without understanding key terms, leading to unexpected liabilities. The group could lose negotiating leverage if trustees believe members will receive little or are unlikely to proceed. The dispute could become prolonged and procedural, increasing legal and insurance costs relative to the benefit delivered to members. Confidence within the group could fracture due to perceived unfairness or lack of transparency.
Current Situation:
Preliminary legal views suggest a credible basis for claims, such as fiduciary duty or negligence. A CFA/ATE route is being explored to avoid upfront funding. However, indicative ranges suggest a substantial portion of recovery could be allocated to success fees and insurance. Members have requested clarity on net outcomes and liability risks if someone withdraws after signing. Concerns have been raised about the impact of Mike Saltmarsh's bankruptcy on the legal strategy.
Action Strategy:
Obtain a one-page deal sheet from any shortlisted firm showing success fee percentages, ATE premium basis, disbursements, and worked examples of net-to-member outcomes. Require plain-language confirmation of whether members can accept an individual settlement without penalty, the exact withdrawal liabilities, and what triggers ATE costs. Treat litigation as a gated decision, with a pre-action protocol and settlement attempt first, proceeding to litigation only if terms are understood and acceptable. Maintain a PHC Port evidence trail to strengthen negotiating leverage and reduce legal discovery thrash.
Concern Category:
Litigation Funding
Keywords:
CFA, ATE insurance, no win no fee, success fee, net recovery, withdrawal clauses
Analysis: Not available
| Snapshot History |
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| C490_260218.pdf |