In a divorce case, does Novitas take assignment over the proceeds of the financial settlement?
Yes. The client assigns the proceeds of their financial settlement to Novitas. Any lump sum payments or proceeds from a property sale, for example, are used to pay the Novitas loan first before the balance is passed to the client.
What happens if any settlement proceeds are received before financial proceedings have concluded?
Any monies that are paid to the client as part of the financial proceedings are considered proceeds of the financial settlement and therefore must be held on account for Novitas. If the client requests to use those funds before proceedings have concluded, then the request must be put in writing to Novitas for approval.
Any breaches of the loan agreement by the client can result in Novitas calling-in the loan and requiring full repayment of the loan and any interest owing. This can include dis-instructing you as their solicitor without agreement from Novitas or failing to follow advice from their solicitor which impacts our prospects of recovering our funds from the anticipated financial settlement.