ULP can source Litigation Finance (loans ranging from £50,000 up to £1,000,000) for meritorious commercial legal disputes against credit-worthy Opponents, provided that:
1. The amount of damages claimed comfortably exceeds the amount of finance required
2. You are able to put up adequate security.
What do we mean by adequate security?
In addition to gauging the strength of your litigation and its likely proceeds, plus whether finance protection insurance will be available to you, Lenders will expect a charge over one or more of:
Litigation Finance significantly reduces the ongoing commitment needed to pay your Solicitor’s fees and disbursements throughout the legal dispute and you can make an application for Finance at any point during the legal dispute.
Litigation Finance and Litigation Funding are often confused. Finance is a loan made on a ‘recourse’ basis, meaning that the loan capital and interest will be repayable regardless as to the outcome of your litigation. Litigation Funding is where a Funder takes a stake in your litigation and is paid out of your winnings only if the litigation is successful and the proceeds are sufficient; if the litigation loses then the Funder has to write off their investment and there is nothing to repay.
We have over 15 years’ experience arranging Finance or Funding for litigants and will use our expertise to ensure that your case is presented to the most appropriate Lenders and in the most positive manner to ensure that you the have the best chance of getting finance offers.
We will manage your expectations by keeping you fully informed during the process and if necessary can explore alternative options for you.
We can arrange any supporting insurances that are required by the Lenders, or that you require.
We have compiled a list of frequently asked questions and answers. But if your question is not listed, do call or email us.
Interest can be from c.1% per month for the loan duration. Loan periods range typically from 12 to 36 months.
The loan can only be used to pay for your Solicitor’s fees and any disbursements that are incurred in relation to your legal dispute (e.g. expert’s costs, Barrister’s costs, court fees etc.). The loan cannot be used to pay VAT if you are VAT registered and able to claim VAT back from HMRC. The loan also cannot be used to pay for your Opponent’s costs or any award in favour of your Opponent.
The amount of money that you can borrow will be determined by the amount of security that you can provide and the affordability of the loan - both in terms of your ability to pay the interest payments and your ability to repay the loan in the event that the litigation proceeds and/or any finance protection insurance are insufficient to fully repay the loan.
The Lender will agree a loan facility with you which you can use as your dispute progresses. You will approve each request by your Solicitor to draw money down from your loan facility. Approval means confirming (based on your Solicitor’s advice) that your claim still has sufficient merits to continue and that your Opponent still has the ability to compensate you more than adequately.
There are two types of interest-only loans available. The usual position is where the loan interest is payable as your claim progresses and you will be required to maintain the ongoing payment of monthly loan interest. Failure to maintain the ongoing payment of loan interest could result in additional charges and/or the Lender recalling the loan. Alternatively, it may be possible to defer (‘roll up’) interest and pay this upon conclusion of your legal dispute.
It is important to make sure at the outset that you have enough money to see your legal dispute through to conclusion, as if you discontinue due to insufficient finance then the original loan capital advance will need to be repaid in full. Your Solicitor will prepare a costs budget for you and help you with this.
If additional borrowing is nonetheless needed, this will only be considered where additional adequate loan security can be offered in support of the new application and after a renewed enquiry into the affordability of the loan.
Yes, we may be able to arrange finance protection insurance for you; this is designed to repay the loan capital drawn down when:
you have not been successful in the claim against your Opponent
you have been successful in the claim against your Opponent but you have not recovered enough from them to repay the loan capital in full
your Opponent has become insolvent or bankrupt before you have recovered damages from them.
Some Lenders will insist on a finance protection insurance policy in addition to the security you have offered them for the loan. Finance protection insurance may be purchased even if the Lender does not require it as a condition of the loan.
An ATE insurance policy will pay your Opponent's costs in the event your claim is unsuccessful. Often it is possible for ULP to arrange an ATE policy with a deferred and conditional insurance premium, meaning that the premium is only payable if and when you receive a successful outcome in your litigation.
More information about ATE Insurance is available here.
If Finance Protection Insurance and/or ATE Insurance is required, then a positive Barrister’s opinion is more will be required in support of your application.