A Canadian law firm financier, which launched in the UK last October, has said that it plans to lend more than £50m to personal injury lawyers this year.
SpectraLegal, which is owned by BridgePoint Financial Group, says that it offers firms a unique combination of secure finance and strategic expertise.
The company has already approved in excess of £10m of loans to a handful of firms, including backing Pure Legal’s £13m acquisition of clinical negligence specialist firm Pryers in December. It has said that it will initially target personal injury firms operating on conditional-fee and damages-based agreements, through two types of financing facilities – Costs Advance and WIP & Disbursements.
Costs Advance facilities enable law firms to draw down against expected costs awards in completed cases, meaning they can release cash without having to compromise on their costs claims. It is through this scheme that funding for the Pryers acquisition and backing for Pure’s expansion plans have been put in place.
WIP & Disbursements facilities help firms monetise their WIP and disbursements to progress their cases, subject to a minimum of £200,000 for each facility.
SpectraLegal – which is supported by major institutions, including Royal Bank of Scotland – is led by COO Steve Carter, former head of professional practices (north) at accountants Baker Tilly, and business development and client relations director Matthew Gwynne, former UK head of credit structuring at Standard Chartered Bank.
“The combination of our secure position and market insight has really struck a chord with firms, with new applications coming in all the time,” said Carter.
“Law firms like the fact that our business is based on growing those with whom we do business. Unlike traditional investors, such as banks, we spend just as much time looking at the market as we do the firm’s books. We delve deeper, make plans, organise and advise.
“Alongside this we’ve invested in a bespoke online platform that allows us to look at a wide range of factors, including how fee-earners and suppliers are performing. The result is a level of independent, proactive and granular analysis that firms may not have had access to previously.”
Since launching in 2005, BridgePoint has established funding relationships with over 750 law firms across Canada.
There are strong similarities between the Canadian litigation system and that in England and Wales. The damages-based agreements regime introduced by the LASPO Act in 2013 was copied directly from the one operated in Ontario, which created similar financial pressures for Canadian law firms.