VFS Legal
Case Studies
Costs Advance Facility
CAF provides the law firm with cash flow to maximise the profitability of a case at the time of issuing the bill. This enables the law firm not to be forced to accept a reduced settlement, driven by the constraints of the law firm’s own finance facilities rather than the merits of the case.
| Assumptions: | |
| Gross Bill Value | £120,000.00 |
| Expected Correct Settlement | £100,000.00 |
| Law Firm Requires Immediate Cash Flow | £50,000.00 |
| – VFS can advance up to 80% of WIP / Dibs | |
| Use VFS CAF Immediate Funding: | |
| Law Firm Receives Immediate Funding from VFS | £50,000.00 |
| Defendant Offers Low Settlement | £80,000.00 |
| – VFS funding enables law firm to reject low offer | |
| – It takes further 60 days to settle + 30 days for payment | |
| BUT settle at full value of Expected Correct Settlement | £100,000.00 |
| Law firm also entitled to statutory interest | |
| Outcome: | |
| Increase in Settlement | £20,000.00 |
| Statutory Interest ((£100,000 x 0.08) / 12 months x 2 months) | £1,333.00 |
| Cost of VFS Funding (3 months Interest + 1% fee) | £2,375.00 |
| Increase in Law Firm Profits | £18,958.00 |
| – Cash Flow to meet law firm needs | |
| – No breach of any overdraft facility | |
| – Increase in Profitability | |
| – Simple, Innovative, Proven |