Our key service is to manage all aspects of a sale or an agency arrangement to a group of specialised firms that will run off PI cases and help achieve 100% of the WIP value, as well as monitoring the entire run off to conclusion.
It both frees you from the significant distraction of managing a run off while avoiding the need to heavily discount the value built up in WIP.
Of course, we appreciate no two situations are the same and, if necessary, we can include an element of discounting to generate cash on day one. However, this is not the objective, as we feel there are more efficient ways to fund a run off and without the need to give away the lion’s share to a purchaser.
Here at PI-Solutions, we aim to minimise costs, particularly at the outset. Usually there is no cost to initiate our service and we defer fees until cases settle.
In addition, in order to keep fees to a minimum, JMW Solicitors’ corporate team has helped us draw up a template contract that is simply customised for each client. Subject to JMW Solicitors’ agreement, if utilised, payment of legal fees may be deferred until cash flows directly from the cases placed into run off.
For more information see Funding & Cashflow.
Due diligence is a cost that comes into play regardless of how you look to transfer files.
While it pays dividends to prepare for a sale by ensuring files are up-to-date and in good order, investing heavily in being sale ready is likely to create waste through duplication.
If genuine, purchasing firms will invest in their own due diligence, regardless of whether you have or not. This cost will not be charged to you but, at the end of the day, it has to be paid for and will therefore be reflected in the discount applied.
If the purchasing firm is one of the ‘tyre kickers’, due diligence and indecision will be one of the reasons for delay and procrastination on the part of the purchaser.
SRA guidance released in 2015 clearly indicated that the spirit of best practice is to avoid allowing interested parties access to client files and instead focus on financial information to assess the value of the firm. However, when it comes to claimant PI, historical financial data provides little assurance in respect of the WIP value incumbent in an individual file and so all traditional buyers will require some form of formal valuation and due diligence. The PI-Solutions’ model not only allows for such access to files to be avoided until client consent has been received, but also ensures that client consent is not sought prior to a deal being concluded.
In our case, where the book is simply being run off on your behalf by panel firms, due diligence is significantly lighter than if you decided on a traditional fully discounted sale. As such it also allows us to move more quickly from initial enquiry to completed legals, saving both time and money.