We have recently seen a number of high-profile cases in the divorce market where litigation funding (or loans provided to clients to support the funding of their divorce) have been provided by third-party bodies. Such funding provides a client with resources to robustly defend his / her divorce claims, that is clear, but are they relevant and what is the alternative?
What could go wrong?
We have indeed seen litigation funding provided to spouses of some of our clients, resulting in them initially being very aggressive in their approach and their solicitors and counsel being very active, only to then run out of the funding source and further advances are then not forthcoming.
This leaves the client ‘down the river without a paddle’ so to speak and their solicitors wondering how they are going to be funded for the remaining months or years of litigation. And remember litigation funding is not cheap with any loan. The provider assesses the risk of non-payment and sets an appropriate interest rate – nearer to 20% in many instances putting further pressure on the client to settle to prevent escalating interest cost.
We also cannot help the feeling that if someone is approved a litigation funding of say £50000 – then the solicitor automatically has a budget to work to and guess what? It is always exhausted and, in many examples, much more.
So, the message is clear – whilst there are few providers now in the commercial markets (Novitas we understand have withdrawn from writing new loans) – litigation funding may have its place, but it is both expensive and does not guarantee you are going to get a result when the money has all been used up.
Alternative ways to fund a Divorce
What are the alternatives? Supportive parents and friends may be able to help, much like the bank of mum and dad often come to the rescue. Although, remember it still has to be repaid and having funding sources doesn’t make your solicitor any more responsive to getting you a settlement.
That’s where Fair-Result comes in – we provide such funding. In essence, our fees are never payable until the settlement is reached – and we will often be able to wait if there is a house to sell, to release capital, to pay our fees. And because we are a bit like Father Christmas – we don’t charge interest either – it makes us hungry to get you an equitable settlement, reducing your costs and risk – motivates us like no other!
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If we can help you with matrimonial, or any other legal queries you have, please don’t hesitate to contact us for a free initial consultation.