More clients predicted as loans replace up-front costs

The Law Society is predicting an upsurge of clients willing to take up cases after the announcement of a major funding scheme to manage legal costs.

Merchant bank Guinness Mahon and Co is to offer a Disbursement Funding Loan at an annual percentage rate of 14 per cent.

The scheme was developed by Richard Pearce, head of the Law Society's professional services unit.

He is confident it will encourage people who have been put off by up-front legal costs, such as medical reports, to take cases to court.

“I think we will have a scheme that will benefit both the profession and the public,” he said.

This week solicitors will be sent an application form. Once they have registered they will receive a free computer software package to generate the necessary loan documentation. Written documentation is also available.

Guinness Mahon will have the final say as to who receives loan facilities. The scheme will not apply to conveyancing disbursements as the turnover period for work is too short.

Sole Practitioners Group chair, John Limbury, said the scheme would be welcomed by all lawyers. “I think it is something that is first class as a concept.”