The Benefits of Manolete’s Funding Model in the post-LASPO Era – 6th April 2016
Today marks the ending of the recoverability of CFA success fees and ATE insurance premiums, bringing insolvency litigation costs in line with all other areas of civil litigation.
The Government has clearly pointed to litigation funding as the way forward.
Manolete Partners PLC is by far the UK’s largest specialist insolvency litigation funding and litigation acquisition company. Based on our results, compared to CFA/ATE cases, the returns to creditors are very significantly higher and are realised very much faster. The UK is blessed with a simply exceptional Recovery and Insolvency profession but many IPs are under tremendous competitive, regulatory and cost pressures – in large numbers they turn to Manolete on a consistent and recurrent basis to realise the major (or only) asset left in the Insolvent Company – the potential litigation claim.
Other significant attractions for IPs and their lawyers using the Manolete Model are:
- The Office Holder and the Company are completely de-risked
Whether we buy the claim (via a simple assignment) or we fund the claim (providing an unlimited indemnity to the Office Holder), the case proceeds at no risk whatsoever to the Office Holder and to the creditors of the Insolvent Company. We never stipulate a fixed or capped monetary amount that we are willing to invest – we provide an unlimited financial commitment to your case.
Furthermore, Manolete always pay a cash sum up front plus a majority share of the net proceeds – so the Office Holder and Company win, no matter what the eventual outcome of the litigation.
- High and Fast Returns to the Insolvent Estate
Many leading figures in the Recovery and Academic communities consistently remark upon the high level of returns on Manolete’s cases. Manolete pays all costs on its cases as incurred (never contingent on the outcome). Once a recovery is made, those costs are re-imbursed and only then does Manolete make any return on its investment. It is at this level that the Insolvent Estate also makes its return on the case. So Manolete and the Creditors are uniquely and perfectly aligned under our model.
Manolete’s share of the net proceeds (after paying all legal and related costs) starts at 50% but rapidly declines to 20% as the net recovery increases.
The speed of completion on our cases is key. We believe that “slow justice is no justice”. Our average time to complete cases is 8.1 months – far quicker than any metric under the CFA/ATE model. The speed of execution means costs are kept proportionate and therefore returns to creditors are maximised.
- Paying IP’s investigation fees
Very often the crucial evidence for a case will come from the IP team’s excellent investigation work. As the cases we deal with get ever larger, we are more than happy to pay the IP to undertake further investigation and review work as and when needed.
When we take assignments of large cases we often end up paying the IPs very significant sums to undertake review, Witness Statement and further investigation work. We pay lawyers for their excellent legal work, so IPs are treated the same as professional service providers for their work.
- The Legal Team get paid regularly and rapidly
We pay all lawyers on our cases at normal charge out rates, as the costs are incurred. Invoices are paid within 48 hours of receipt. We will always ask for a one line estimate for each stage of work to ensure that overall costs are being kept proportionate to the likely recovery. Many law firms and counsel work on several Manolete backed cases at a time and we soon become a major client relationship for the practice.
- The Office Holder Chooses the Legal Team
There is no preferred “panel” of solicitors and barristers on our cases. The Office Holder chooses his or her tried and trusted team. Manolete is there to finance and support that team.
The winning combination behind all of our cases is:
World Class Insolvency Skills + Outstanding Legal Advice + Manolete’s Financial Backing
- Fast Decision Making
We are renowned for our fast decision making. Most other litigation funders and ATE insurers are criticised for the months they take to make decisions. We commit to a decision within 1-5 days. Smaller cases are often approved on the same day.
- The Days of Expensive, Risky and Slow ATE cover are over
The ATE cover is free when Manolete is funding your case. Our funding provides for a full indemnity for adverse costs at no cost to the case whatsoever. When we purchase a case the adverse cost risk is our concern alone, which we self-insure.
Many IPs have raised concerns about the effectiveness of ATE policies to provide real cover when cases are lost and cost orders are made against IPs. This never occurs when Manolete provide the funding.