Disbursement Funding For Clinical Negligence Frequently Asked Questions for Clients in England and Wales

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1 Disbursement Funding For Clinical Negligence Frequently Asked Questions for Clients in England and Wales

2 Disbursement Funding For Clinical Negligence Frequently Asked Questions for Clients Novitas is a specialist lender for the legal profession. Operating across the UK, Novitas provides innovative and cost effective solutions for solicitors and their clients. One service we offer is to fund the disbursements necessary in pursuing a clinical negligence claim. These disbursements, such as the cost of medical reports, depending on the nature of the claim, can be substantial. Our service recognises that clients do not always have the money available to pay these disbursements during the life of the case. The loan is provided as a facility against which the client can draw down to meet these costs as they fall due and has the following features: Quick and simple to put in place; Facility usually runs for the duration of the claim; Unlimited number of drawdowns; Nothing to pay until the case finishes; Nothing to pay if the case if lost; No requirement to make interest payments during the life of the case. 1. What is the funding facility? A CCA regulated loan between you and Novitas; the loan funds a range of disbursements for clinical negligence cases. Money can be drawn as needed against this loan and paid directly into your solicitors client account. The money is used to reimburse the firm for disbursements already invoiced or held on account against future disbursements. An insurance policy is put in place prior to the first drawdown request. This is arranged by your solicitor and will cover Novitas for any money you have borrowed. 2. What is the size of the loan? The size of the loan is set on an individual case basis and your requirement should be discussed with your solicitor in the first instance. 3. Must the loan be covered by insurance? Yes; our disbursement funding must be covered by an insurance policy from an approved insurer. The policy proceeds will be used to repay Novitas if a case is not successful. 4. What happens if my case is lost? Novitas is repaid via the insurance policy so there is nothing for you to pay.

3 5. What happens if I stop the legal proceedings? The law firm must notify the insurer and Novitas immediately and a claim will be made on the policy. You may be liable to repay the borrowing depending on the reason for the case stopping. 6. What does the Scheme Cost? If the case is lost, there is nothing for you to pay. If the case is successful, you will be liable to pay from your award: An administration fee of 75 or 1% of the draw if higher for each sum drawn down. This is added to the amount drawn down and taken directly by Novitas; Interest rate of 15% per annum on any amounts drawn down. Interest is only charged on the money drawn-down, not the whole facility, to keep the costs down. Recent legal precedent may make a proportion of the interest recoverable from the other side. This is not guaranteed however so you should assume that the interest is to be repaid from your settlement The non-recoverable element of the insurance policy. Your solicitor can provide the details on this. 7. Do I need to service the loan? No; Novitas will roll-up the interest on a simple basis so there is nothing for you to pay until the case concludes. 8. How often can the loan be draw down? The loan can be drawn down as many times as you like, up to the limit of the loan. 9. Can the solicitor make a draw down without me knowing? The solicitor has the right to draw down as they require. However, you will be notified by when a drawdown is made and can contact the solicitor directly if you have any queries. 10. How long is the loan for? The funding must be repaid on conclusion of the claim to which it relates, but there is no fixed loan term. 11. How long does the process take to get the funding in place? You sign the loan agreement as part of the standard client take on. There is then a cooling off period of 14 days after which funds can be drawn. Novitas uses an on-line system to streamline the lending process. You will receive a notification each time the solicitor makes a draw. 12. Do I have to sign anything? As part of the standard pack with the solicitor, you will sign: A CCA regulated loan agreement; An instruction letter by which you provide the necessary instructions to the firm; An assignment of the proceeds of the claim and the insurance policy;

4 13. Do you require security for the loan? The security for the funding is in the form of an assignment of the insurance policy and over the proceeds of the case given. 14. How does Novitas get repaid? Novitas is repaid from either the proceeds of the claim or the insurance. You instruct the law firm to make the repayment from the proceeds. 15. Do I need to read anything else? Yes, you ( and your solicitor) need to read carefully the loan agreement. That sets out the binding terms for the loan. This FAQ is intended to be for information only and you should not rely on it when making a decision to enter into a loan agreement. 16. If I am interested, what do I do next? Once you have read these FAQs, if you are interested in the scheme then please talk to your solicitor. They will provide further information and the loan paperwork for you to review and sign.

5 2014 Novitas Loans Ltd. This document contains confidential information that is the property of Novitas Loans Ltd. All use, disclosure and\or reproduction not specifically authorised by Novitas Loans is prohibited. All names are trademarks of their respective holders. Novitas Loans 27 Barnack Business Centre Blakey Road Salisbury SP1 2LP T +44 (0) E enquiries@novitasloans.co.uk Novitas Loans Limited Registered in England No Registered Office 78 Duke St. London W1K 6JQ