Exclusive: Solicitors probed over client loans to fund divorce cases

Solicitors are coming under the spotlight amid growing concern about how vulnerable clients were sold loans to fund family litigation. More than a dozen people have claimed to the Gazette they felt compelled to take out the loans with Novitas, now a subsidiary of merchant banking group Close Brothers, to fund proceedings in the last 10 years. They borrowed from £20,000 to £350,000 at an annual interest rate set between 18% and 30%. Both financial and legal regulators are understood to be investigating allegations – so far unfounded – of misconduct.

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Insights

Voss report is unsatisfyingly hollow and narrow

Tets Ishikawa of LionFish criticises the Voss report as “unsatisfyingly hollow and narrow”, pointing out that the reference to funders’ returns being up to 300% or even 3000% is heavily misguided, the report fails to define the claimant group it is seeking to protect, and that it fundamentally misses the real crux of the issue, which is that making losing defendants pay the cost of funding is a far more obvious way to address the issues identified in the report.

In the News

News focus: EU to clamp down on booming litigation funding sector

Opponents of the EU clampdown on the booming litigation funding sector are pointing to the unwinding of similar proposals that were made to regulate the industry in Australia and arguing that legislators pushing for more regulation have failed to understand how the industry operates.

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