The ability for a client to fund disbursements has always been a key consideration when preparing a legal budget. The implementation of the Jackson reforms and the increase in the cost of court fees has meant the cost of disbursements is now more relevant than ever. These initial costs can be a significant barrier to pursuing a claim.
Anyone in the legal industry who has interacted with litigation funding will know it can be an expensive way to finance litigation. There are good reasons for the cost. Litigation is an inherently risky endeavor and the returns funders charge are proportional to the risks to which they are being exposed. You will also be well aware that historically litigation funders have tended towards very large cases, often requiring a significant cost to damages ratio before they become willing to get involved. As such, it has been difficult to obtain disbursement funding at a proportionate cost.
Thankfully that is changing and TheJudge have been working to bring an influx of new funders to the market that are focusing on funding disbursements (including Counsels fees) where the economics may not have attracted the interest of more traditional litigation funders. These funders are plugging a significant gap in the market that has been somewhat neglected to date.
The result is that TheJudge now have access to a number of litigation funders that are willing and able to provide capital at much more competitive rates than has historically been available. These funds can make commitments from £25,000 up to £1,000,000. Law firms are increasingly using access to these disbursement funds to unlock more claims from clients that otherwise wouldn’t have the ability or the appetite to fund what can be a relatively unpalatable outlay.
Disbursement funding on this scale can be valuable tool for firms looking to attract clients via alternative billing arrangements. Whilst alternative billing takes care of lawyer’s fees, it still leaves clients with a requirement to fund their own disbursements (usually included Counsels fees), or, in some cases, leaves the law firm funding the client’s disbursements as part of that retainer arrangement. In this scenario, disbursement funding can step in and ensure that these costs are no longer a barrier to the claim progressing, or to alleviate the need for law firms to self-funding disbursements allowing capital to be deployed more effectively elsewhere.
If you have a case which requires or may benefit from disbursement funding then please don’t hesitate to contact our team.