A funding scheme set up by Just Costs Solicitors and Novitas Loans, which helps bridge the gap between applying for and receiving case fees, has advanced over £10 million to law firms.
Set up at the end of 2013, the scheme is currently paying over £1 million a month to solicitors who wish to draw down up to 70% of their likely recoverable costs once they have successfully settled personal injury, clinical negligence and industrial disease cases.
Operated online, loans are worked out by Just Costs, which assesses a case and then advises Novitas Loans on what it considers to be a reasonably recoverable amount. Novitas then makes funds available to draw down within 48 hours. The loan is then repaid to Novitas once Just Costs has received funds from the defendant.
Mark Hartigan, the client services director at Just Costs, said that the scheme had been extremely well received by firms throughout the country. “One of the reasons firms are finding themselves under pressure is that they are fundamentally profitable but are not turning unbilled WIP and debtors into cash quickly enough,” he said.
“Our costs advance scheme emphatically addresses this issue. The benefits are numerous – improved cash flow, simple administration and fast payment.”
Jason Reeve, managing director at Novitas Loans added: “Novitas is now the leading provider of law firm funding; the success of cost advance, with new firms joining every month, shows that we are helping law firms solve improve their cash-flow.”