How to Choose a Reliable Insolvency Litigation Funder
The development of litigation funding in recent years has led to a much wider range of possible funding options for office holders than existed just a few years ago. For access to justice, that can only be good news.
When considering which funder to use, the office holder exercises their wide commercial discretion. The checklist of questions appended to Professor Walton’s report ‘Insolvency Litigation Funding – in the best interests of creditors?’ published in April 2020, will no doubt assist, both in making the right choice and providing a record for the file.
The checklist is repeated below: each question is followed by my answer, from Manolete’s perspective. Unquestionably partisan but 100% verifiable. We hope it helps.
Insolvency Litigation Funding – in the best interests of creditors?
(Appendix One, Page 61)
Suggested checklist when using a funder or assignee.
(Manolete’s answers shown in red.)
1. Does the Funder have a demonstrable track record in financing insolvency litigation claims?
Yes, without doubt.
12 year trading track record. Over 600 invested UK insolvency cases of which more than 380 have completed, generating recoveries of over £34m for insolvent estates.
Manolete Partners is the only firm ranked Band 1 for Insolvency Litigation Funding in Chambers Litigation Support Guide 2021.
Winner of the TRI award “Insolvency Litigation Funder of the Year” on four occasions and current holder.
2. What is the minimum case size the Funder will consider?
£20k.
3. Is the finance provided open-ended or subject to a defined limited commitment by the Funder?
Open-ended.
4. Is a counsel opinion essential for my case to be considered?
No.
5. Does the Funder offer an assignment option or funding only?
Both.
6. Can I retain a percentage interest in the final outcome?
Yes.
7. Can I sell the claim in its entirety at the outset, taking a single one-off payment into the Estate?
Yes.
8. Does the Funder provide me and the Estate with a clear and full adverse cost indemnity or do I need to source ATE as well?
Full indemnity, no ATE required.
9. What is the financial strength of the Funder that backs its indemnity and will that satisfy any Security for Costs issue?
Net assets of £39m.
Listed on the London Stock Exchange, £25m loan facility with HSBC (£10m drawn down).
No security for costs challenges to date and we could meet any should they arise.
10. Do I get to choose the legal team who work on this case going forward?
Yes.
11. Where I have assigned the case: will I remain involved or at least be kept regularly informed of progress on the case? Can I participate in any ADR meetings if I choose to do so?
Yes, you remain involved. You are kept regularly updated and are welcome to participate in any ADRs.
12. Can I receive some money into the Estate up front to defray some/all of my and my lawyer’s WIP and how do I recover any remaining outstanding costs incurred prior to the assignment/ funding agreement?
Yes, a significant upfront payment is included as part of the funding or assignment agreement. Outstanding costs previously incurred are recovered from the Estate’s share of the total settlement or award.
13. Will the legal team have to work on a full or partial CFA or do they get paid as the work is completed, at base rates?
No CFA required. Paid as the work is completed, at their normal rates.
14. Can the IPs’ litigation support/further investigation costs be covered by the Funder?
Yes, this can be considered.
15. What percentage of the final recovery will the estate get? Does that percentage increase as the recovery level increases?
Never less than 50% and up to 90% depending on the level of recovery.
Yes, the percentage increases as the recovery level increases in more substantial cases.
Charity Bike Ride for the Great Ormond Street Hospital Children’s Charity - 19 September
On 19 September, fellow Manolete Associate Director, Dominic Vincent and I will be taking part in a London to Brighton charity bike ride for the Great Ormond Street Hospital Children’s Charity, together with friends from several IP and law firms.
Below is the link to our JustGiving page; we would be most grateful, if you would like to contribute.
We will be setting off about 8am on Sunday morning 19 September. So wish us luck and look out for the photos of middle-aged men (and a few younger ones) in lycra which we will be posting on LinkedIn after the event.
Neil Stewart
Associate Director for the South
neil@manolete-partners.com
07771 963 975