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Clients: Civil litigation

About the loan

    What is the difference between my solicitor and Novitas Loans?

    Your solicitor will carry out the legal proceedings to pursue your claim and provide you with legal advice. Novitas provide funds to pay for third party disbursements incurred by your solicitor in relation to your case, so that they can carry out this work. The funds will be used to pay for expert reports, barristers, court costs and other legal fees. 

    What can the loan be used for?

    The loan is regulated under the Consumer Credit Act 1974, and can be used solely to pay for any disbursements associated with your civil litigation legal proceedings, for example court issue fees, medical reports and GP records.

    How does the loan work?

    The loan is a pre-approved facility. The money is used as it is needed and paid directly to third party providers to reimburse them for disbursement costs associated with your case. You do not have to use the entire loan amount and interest only accrues once the money is sent to reimburse third parties. So, while funding is always available, you only pay for what is used.

    The loan contract is between you and Novitas. Your solicitor has an obligation to communicate to us any material facts that may affect repayment of the loan during your case and to pay off the loan from any proceeds received as part of your settlement. The remaining amount will be passed on to you.

    A Novitas loan for a civil litigation case operates on a no-win, no-fee basis, provided you continue your claim until the conclusion of the court case.

    If your claim is successful, the loan amount will be recovered from the opponent. If your claim is unsuccessful, it is covered in full by a Legal Expense Insurance Policy, which is arranged by your solicitor and you will not be liable to repay the loan.

    How much does the loan cost?

    Our charges are transparent and straightforward.

    If your case is lost, you do not have to repay anything.  If you win Novitas is repaid from your award. This will include:

    • A documentation fee of £78 if you request a home visit to sign your loan agreement. No fee applies for electronically signing your loan agreement via ‘e-sign’.
    • An administration fee of £60 for each of the first three amounts drawn down from your loan. This is taken directly by Novitas and added to the amount drawn down.
    • Interest rate of between 15.3 - 30.3% per annum (dependent on claim type) on any amounts drawn down. Interest is only charged on the money drawn down, not the whole facility.

    Interest is fixed and calculated on a simple basis, i.e. there is no compounding of interest. 

    We take the annual interest rate, multiply by the amount of the facility they have drawn down and divide by the number of days that the money has been drawn down for.

    The interest rate will vary between 15.3% - 30.3% dependent on the Civil Litigation product.

    Representative Example: 

    Total Amount of Credit: £13,500.
    Total Charge for Credit: £3,241, includes: 

    • £78 documentation fee  
    • £60 administration fee
    • £3,103 loan interest (assumes full loan amount drawn down on  day 1)

    Rate of interest 15.3% per annum (fixed)

    Duration 18 months

    Total Amount Payable £16,741
    Representative APR 16.1%

    How long do I have to repay the loan?

    The agreement has no fixed duration but will last at least 12 months.  It will end once all sums due are repaid.

    Do I have to have insurance?

    Yes. Your loan must be covered by a Legal Expense Insurance Policy which will repay the loan if your case is not successful. 

    How is the insurance arranged?

    Your solicitor will arrange the insurance with our approved insurer. The cost of the insurance is only payable if you win.  If your case is lost, you do not have to repay the premium.

    What happens if my case is unsuccessful?

    Novitas is repaid from the insurance policy so there is nothing for you to pay.

    What happens if I agree to the loan but choose not to proceed?

    If you wish to cancel your loan, you can do so within the 14-day cooling off period upon signing your agreement and you are not required to repay the funding loan. If you wish to cancel after this period, the loan will need to be repaid as per the terms of your agreement. 

    Is it in my solicitor’s interest for me to use a Novitas loan?

    Your solicitor is independent so receives no financial incentive from Novitas and cannot recommend us to you. Our loan service is a funding option available for you to consider, and only you can decide to proceed with a Novitas loan.

    Does every solicitor have access to the Novitas scheme?

    No. Our loan service is only available through approved firms on our civil litigation funding scheme.

    What happens if my solicitor is suspended from practice by the SRA during the term of the loan?

    You can cancel your loan facility which will require immediate repayment or with our written permission, transfer the loan facility to another solicitor.