IN MANY Western countries, including America and Britain, divorce lawyers are not allowed to represent a client in exchange for a share of whatever settlement they secure, rather than for a fixed fee. Such arrangements, it is feared, would beget more and nastier divorces. Yet the same rules do not apply to financiers: they are free to fund legal battles over marital assets—and a growing number do.
Novitas Loans, a British firm, is currently lending to 1,500 would-be divorcĂ©es (most are women) or divorcĂ©s, at 18% annual interest. The loans are intended to cover legal fees; applicants typically expect to win assets worth three times their borrowing. Without the loans, many would have to give up and settle for much less, says Jason Reeve, the firm’s managing director. It gets lots of thank-you letters from borrowers, he claims. Demand for loans of this kind has jumped, notes Nigel Shepherd of Resolution, an association of family lawyers, since the British government restricted legal aid for divorces in 2013.
Brendan Lyle of BBL Churchill Group, an American firm with cases in 27 states, says his role is “part financier and part...Continue reading
Source: Business and finance http://ift.tt/24R6FOm
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