Litigation Finance

Anything Legal Ltd can arrange for the provision of an overall firm-wide facility to Solicitors, under which the funder extends loans to your clients to enable them to pay your fees and disbursements.

All loans are underwritten by your firm. Defaults are very rare when the facility is used for its intended purpose of bridging finance as opposed to risk finance.

Whilst the funder reserves the right to consider every client loan application individually, they are guided by you as you apply your firm’s overall facility across your client base.

The facility is appropriate when a minimum settlement can be reasonably assessed and the client lacks the necessary cashflow to fund the action. Generally, this is matrimonial actions, probate cases and personal injury or medical negligence claims.

Each nominated client completes a loan agreement and pays the monthly interest charges. In some cases, interest payments can be rolled up into the loan for up to 2 years or your firm can pay the interest charges on behalf of the client.

At the end of the legal action, or at the end of the loan term, the client must repay the loan. This period can be extended in exceptional circumstances. The loan can only be used to pay your fees / disbursements and payments are only made to your firm’s bank account. You have on-line access to all your client’s loan accounts and you can initiate draw-downs at any time, up to the agreed limit.

If ATE insurance is in place, the loan repayment and possibly the interest charges on any loan maybe covered under your existing insurance. For example, a personal injury case under a conditional fee arrangement might require finance for expensive disbursements. These disbursement costs and the interest on any loan to pay them could be covered under an ATE policy. You must check your own policy terms.

Benefits for Solicitors:

  •  Guaranteed prompt payment of all invoices and disbursements via client based funding
  •  Competitive advantage against other firms and a competitive interest rate for clients
  •  A firm-wide facility that you can control and distribute across your clients
  •  Online access to all your client’s loan accounts to make drawdowns at any time
  •  Old and new debts can be covered by the facility
  •  No non-utilisation fees
  •  Minimum bureaucracy and no file reviews
  •  If ATE insurance is in place, this may cover the loan and any interest charges

 

Costs to the Client

  •  £75 fee when the loan is set up (fee is added to the loan balance)
  •  £20 fee whenever a drawdown is made on the loan (the idea is to encourage fewer drawdowns to cut admin of the account)
  •  Interest between 1.1% per month and 1.25% per month on the drawn balance of the loan. Larger loans have lower rates.

Costs to the Solicitor

  •  A one off fee of 1% of the total facility initially taken.

This is NOT an annual or recurring fee. The point of the fee is to encourage firms to only take a facility they expect to fully use (the funder has reserves against committed facilities and large unused facilities cost them dearly). If you find the scheme works well for you and you want to increase the facility after the first year, there is no fee on any increase, because they will know that the facility is fully used. We advise firms to start with a small facility that they are confident will be fully used and then increase that facility over time. The minimum facility is £30K.

If you are interested in discussing this further please let us know and we will arrange for the funder to make contact with you directly.

So call us on 0845 474 0145 to discuss litigation finance.