Costs Finance for Law Firms
The case has settled.
The costs haven’t arrived.
Once a matter settles, recovering costs from the other side can still take months, particularly where costs are negotiated or assessed. Costs finance bridges that final gap.
Who this is for
The pressure
The case has settled.
This is often the most frustrating part of the cash cycle. The outcome is known, the work is finished, and yet the firm is still waiting to be paid. For firms with a steady flow of settled matters, those waiting periods add up to a significant sum at any one time.
Costs negotiations and assessments run to their own timetable, and paying parties have little incentive to hurry. Meanwhile the firm has paid its fee earners, its overheads and often the disbursements on the matter, so the cash tied up in settled cases can be substantial.
What can be funded
What it can cover.
- 01 Agreed but unpaid costs
- 02 Costs subject to negotiation or detailed assessment
- 03 Success fees and other amounts due on settlement, where the funder supports it
How it’s often structured
Structured around the practice.
Typically an advance against settled matters, repaid when the costs are received.
Funders look at the amount agreed or claimed, the paying party and how long recovery usually takes. Some advance against individual matters; others provide a facility across a portfolio of settled cases, often alongside WIP or disbursement funding so the firm has one arrangement covering the whole life of a case.
How we help
Not one lender. The right one.
We don't offer a single product. We look at what you're trying to fund, how your firm earns and spends, and which lenders in the market are most likely to support it. Then we prepare the case, approach suitable lenders and manage the process through to completion.
What lenders will want to see
What lenders will look at.
- The settled matters and the costs agreed or claimed on each
- Who the paying parties are, such as insurers or public bodies
- The firm’s track record of recovering costs and how long it takes
- Any costs negotiation or assessment still to run
- The firm’s accounts and existing facilities
Questions
What firms usually ask.
Can I get finance while waiting for recovered costs?
Yes, it is often possible. Costs finance is typically an advance against settled matters, repaid when the costs are received from the paying party. It bridges the period between settlement and payment, which can run for months where costs are negotiated or assessed. We search the market for funders with an appetite for your type of work.
What is costs finance for law firms?
Costs finance is funding arranged for solicitors whose cases have settled but whose costs have not yet been paid. Depending on the funder, it can cover agreed but unpaid costs, costs subject to negotiation or detailed assessment, and success fees due on settlement. The advance is usually repaid when the costs arrive.
Can costs awaiting detailed assessment be funded?
Some funders will advance against costs that are still being negotiated or are going through detailed assessment. They will want to understand the matter, the likely level of recovery and the firm’s track record on costs. Appetite varies between lenders, so we approach those most likely to support the costs you are waiting on.
How is costs finance different from WIP finance?
WIP finance funds work before a bill is raised, while the case is still running. Costs finance comes at the end of the cycle, once the outcome is known and the firm is waiting for costs to be paid. Some firms use both, and some lenders offer them within one wider facility. The Law Society sets out the wider funding options for law firms.
Which law firms use costs finance?
It is most often used by firms with a steady flow of settled matters and long waits for costs, such as personal injury, clinical negligence and commercial litigation practices. When several settled cases are waiting on payment at once, the sums involved can be significant, and bridging that gap can ease pressure on payroll and other commitments.
Let's talk
Waiting on recovered costs?
Let’s talk about bridging the gap.
Before you approach a lender, speak to someone who understands the transaction. Confidential, no-obligation initial discussion.