PI solicitors could be forgiven for feeling a little wounded by changes over recent years, and there is little doubt that those in the defendant sector are now giving more thought to the impact that planned reforms could have on their business too.
After much deliberation and can-kicking, it appears that the time for RTA and sub-£5000 cases being led by a solicitor firm managed by an actual human being is nigh. As the tariff diminishes the available value to such small levels, it seems inevitable that only heavily automated, self-service solutions will be available for UK consumers south of Hadrian’s Wall.
If April 2019 does indeed bring the anticipated changes for RTA cases limit for the Small Claim to £5000, a range of impacts are anticipated. The SRA recently published a report on the 768 (or so) law firms (which predominantly focus in PI) that will be affected in the order of 7% of UK Law Firms. Then, there is the c.750,000 claims that are below the £5,000 limit – all heading to the Small Claims Court, championed by ill-prepared and eager litigants in person.
Although the Insurance elite drive these changes and middle England has been led to believe that claiming for injury following a road traffic accident is the blight of Britain, the fact of the matter is that these accidents and their consequences can have a substantial effect on families who are struggling, or on the bread line. Research undertaken by BMS Funding Ltd has identified that a claimant taking a 2-week unpaid absence off work could have a serious impact on their ability to meet basic living costs. Many of the UK’s population are struggling to make ends meet, one relatively small shock can tip a family over the edge. This can then lead to temptation of pay day loans and the much-understood social impact of such finance agreements are well documented (and another potential class of claim – but that’s for another time)
So, what for the future?
Despite all the upheaval, solicitors are a resilient and resourceful bunch, a bunch who will undoubtedly find a new niche. The market will always determine an answer for small value claimants because they aren’t going away. Indeed, there is an argument that the number of claims could increase as the front line filter that is a Law Firm, is to be removed. From BMS research around 30% of claims are filtered out an early stage, and this is on top of the maybe 35% already removed by a CMC.
At BMS Funding Ltd, we are here to support our partner law firms. We get the temperature check from many firms and CMC’s, as well as Barristers and QC’s – both big and small. We continue to provide funding solutions at low and zero cost to firms in the RTA space, and we can fully support those who want to max out right now. We also recognise that many of our partners are expanding other areas of their firm. So, true to form, we have developed solutions to help them out with that transition.
How does Housing disrepair funding work?
One such area is Housing Disrepair claims. Volume is on the move; the cost of acquiring, running and insuring these cases can be over £2000. Running 100 new cases a month, each with an average case duration of 12 months is a significant financial commitment of £2.4m – BMS Funding Ltd can help.
BMS’s funder provides the case acquisition (£600), ATE cover to be paid on day 1 (c.£495 although this varies depending on the firm process and settlement profile), expert report £850 plus VAT and an arrangement fee of £150. You source and manage the cases. If they are settled off within 18 months, there is no interest or further charges. You then repay the funding as the case settles.
Your only risk is around the acquisition costs (these aren’t insured) and our fee of £150.
Now, we aren’t proposing that the place for RTA lawyers to head is the world of medical negligence. That is a well-worn, costly path that has not borne fruits quickly. It’s quite the culture shock. For those firms who are already in the world of Clinical Negligence, BMS Funding Ltd has a solution. A solution that will allow you to free up tied disbursement funds and take on more work with the assurance that you have the financial means to run the cases. As our model is interest free and available for 4 years, it is an excellent way to manage cash flow, keep clients engaged and work with the UK’s leading experts to help improve the number of cases you ultimately succeed with.
A decent half-way step is Dental Negligence. As a nation we have gone teeth mad. More treatments, more money spent, and expectations of treatment outcomes are rising. Unfortunately, this brings with it more risk and potential negligence for dentists who are under-qualified to do the treatments their clients demand. With a relatively quick turnaround of 18 months, these cases can be well funded by BMS and generate a good return on investment for a Law Firm, particularly when we fund the disbursements.
We have developed an exceptional Commercial Litigation funding model which allows firms to give a proposition to their commercial clients. Our model will ensure that you get more clients on board without the financial exposure that this typically brings to a firm.
So, it pays to talk. You might have some ideas about where you want to take your firm, you may have ideas on how funding could unlock value in your business. At BMS Funding Ltd we work with a commercially focused and open mind, so we can build models that work for you.