Disbursements can quickly add up on an active caseload. It is often necessary for the money to be released prior to the matter settling.
What Counts as a Disbursement
Disbursements are payments that a firm makes on behalf of a client as part of a case. These are usually third party costs that need to be paid to allow the firm to complete the work that it has been instructed to do. This can include payment of court fees, barrister’s fees, the cost of reports from expert witnesses, the cost of obtaining medical reports and the cost of process servers to serve documents on third parties. There are many different types of disbursements and the costs can vary widely.
Why the Timing Creates Pressure
The fees for court can often be in the region of several thousand pounds per application for example. Current court fees have become costly and can quickly add up for busy law firms with high volumes of cases.
How Drawdown Facilities Work
A Disbursement Financing Facility is structured to draw down funds to disburse on a matter as required. Typically the facility would be drawn to fund individual disbursements as they are incurred in order to ensure that interest charged on the funding is limited to the actual amount required to be disbursed.
Which Costs Lenders Accept
Most third party costs will be funded by a lender. However, unusual items such as the cost of an overseas process server or unusual translation costs may require further information or supporting documentation.
How Repayment Is Triggered
upon settlement, judgment or other discontinuance). For Law Firm Finance, visit https://www.novo-modo.co.uk/commercial-finance-Legal-Firms.
Applying for a Facility
Most importantly, Law Firm Finance providers will want to see the case summary, a fee estimate for the work to be done, and evidence that the matter is to be conducted under a formal funding arrangement or retainer.
A well-matched facility will allow disbursements to be paid without putting pressure on the firm’s working capital.
