Commercial Litigation Loan Useful Information
What is a Commercial Litigation Loan?
A Commercial Litigation Loan is a type of financing which can help you pay the costs involved with taking litigation cases based on commercial disputes, to court.
Some forms of litigation funding involve those who provide the funding to receive a share of your financial settlement, once the case has been resolved. Other, more straightforward types of funding are unsecured business loans, which are more appropriate for smaller cases.
The litigation funders will have no control over your litigation or whether or not you accept the dispute resolution reached. Whilst it is possible to apply for help with legal costs when a case is already in motion, it is recommended that funding for litigation is sought as early on as possible, to help ensure that all legal fees are covered.
Those who offer third party litigation funding options must not be connected to your case in any way.
When might you need a Commercial Litigation Loan?
Due to the potentially high costs involved with litigation, many people will be unable to take potentially beneficial cases to court, despite being the victim of ill circumstances.. Few people have legal expenses insurances in place, as, aside from being low on the list of protection insurance priorities, not everyone is aware of it.
In 2010 Lord Justice Jackson published ‘The Jackson Reforms’, which sought to address, amongst other imbalances in the costs involved with litigation, the need for an increase in options available to fund cases for those who faced the prospect of litigation, from either side.
If you have a strong case, which has reasonable prospects of success in court, but are unable to afford the costs of litigation, you may be able to secure external funding to help pay for the costs.
What funding options are available?
There are a number of options available, from a Commercial Litigation Loan, which would pay all legal costs involved in litigation, through to different aspects of third party funding, that can be used to help as a contribution to the overall fee structure. This includes the ability to borrow funding for any number of the following aspects of the trial:
- Third Party Litigation Funding
- Conditional Fee Agreement (CFA)
- Damages Based Agreement (DBA)
- Hourly Rates
- Fixed Fees
- Deferred Payment Plan or Loan
- Legal Expenses Insurance
This can be a complex consideration and your solicitor will be able to advise you which funding option or combination of funding options will be most beneficial to you.
Are there any special considerations?
There are some aspects of this process that you will need to consider before you approach lenders, such as:
- The potential value of the claim, usually only those valued in excess of £250,000 will be provided with third party funding options, however, this is not a strict threshold, and more lenders are becoming flexible to funding cases with a smaller outcome
- Your prospect of a successful outcome; lenders will want to be comfortable that you will be able to make repayments following the dispute
- Any fees incurred prior to approaching the litigation funders will not usually be covered, so it’s important to seek funding early on in the case
- With unsecured business loans, you need to be able to make the repayments on your loan as per the terms of the arrangement. Other forms of funding involve funders taking a proportion of any settlement fee received.
How can Century Business Finance help?
Here, at Century Business Finance, we specialise in providing finance for a wide range of business needs, including unsecured business loans to help with commercial litigation Loans. We will look at your options and offer a fast and efficient response about the funding available to you.
We offer competitive rates and a range of funding options, based on your needs. We will consider each case on its individual merits, so regardless of your industry or the size of your business, we could help you to fund your litigation case.
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