Wealth Chain Capital represents a number of large funds globally who offer funding solutions for many different business sectors.
One, in particular, has a substantial amount of capital available for established, specialist law firms. Enabling firms to increase their case acquisition rate, help with expert report and survey costs as well as ATE cover.
The primary aim of the fund is to help specialist law firms scale their businesses and take on substantially more cases without being hamstrung by the upfront costs associated with taking on new cases and the massive impact this has on cashflow.
We have funded over £150 Million of claims for UK based law firms in the last 12 months.
The funding consists of no set up fee, no draw down fees and no exit fees.
The loan is secured by way of an addendum that is put over the cases, should they in any way need to be lifted away from the firm.
The cases are run on a CFA basis with no win no fee.
The funding covers the cost of the documents needed for the case and the ATE insurance.
The funding facilities are secured against an ATE policy In the event that the case is lost, the costs of the disbursements, the ATE premium and the other side’s costs are covered up to the level of the indemnity stated in the insurer policy.
The charge for the loan is 1.5% interest per calendar month.
The solicitor firm is liable for the 1.5% interest for the duration of the case.
If the case is won, the loan and interest is repaid via the proceeds of the successful claim.
The opposition pay disbursements and the costs. The ATE are paid through the clients settlement.
To qualify for the funding, the law firms is required to have the following criteria:
Once we have established the initial criteria is passed it’s pretty straight forward.
The funder requires the following information below:
Any extra recruitment increases needed to run cases, or increases in premises size to aid the work etc. How the extras work would be managed.
It is important to note that we have said no to more solicitors than we have said yes to. Money Smart are determined to be in this field for the long haul. So it is in our best interests to look after both the ATE and the Funder. We want good firms with experience in the legal claims market who understand that the funding is there to support their firm but not to hold it up.
This model charges the interest upfront and is done on a case-by-case basis. It takes estimated settlement for a case in that campaign. You will then request the full amount of the draw down from the funder for the ATE and the survey/report. The funder will give you funds requested minus the interest amount. Therefore the solicitor will need to pay the difference (the interest) to complete the full payment of the survey and the ATE.
Assume 10-month time line and 1.50% per month interest (the time line will flex with type of claim).
For each disbursement loaded against a claim (Expert report, ATE premium or other individual disbursement) we deduct 15%(10m x 1.50%), so…
So in effect solicitor has to pay £720 themselves
If the case runs over the assumed timeline (10 months in above example) we would switch to monthly interest, which will be developed in the coming months.
This calculation applies to each separate disbursement funded.
The interest is paid monthly. So a direct debit is put in place to pay each month starting with a month after first funds are deployed. This will allow firms to have up to 50% of their Net value for drawn down on.
This model will allow you to pay the interest upon settlement of each case. The interest is compound interest so It is paid back at a rate of 19.56% Apr. The model will allow you to draw down 25% of your net worth monthly. All the funding is paid back to funder including interest upon full settlement of the case.
The interest is paid monthly. So a direct debit is put in place to pay each month starting with a month after first funds are deployed. This will allow firms to have up to 50% of their Net value for drawn down on. .
of claims for UK based law firms in the last 12 months