Housing disrepair
Housing disrepair funding
Housing disrepair funding is the finance that keeps a disrepair practice running while claims work their way to settlement: disbursement funding for expert and court fees, litigation finance for case costs, and working capital against a book of conditional fee agreement (CFA) cases.
Housing disrepair claims are almost always run on a no win, no fee basis. That means the firm or department carries the cost of every case — expert surveys, court fees, counsel, staff time — for months or years before a settlement releases any cash. Funding is what bridges that gap.
The funding market for disrepair work includes specialist disbursement funders, litigation finance providers and lenders who advance against a WIP (work in progress) book of CFA cases. The right structure depends on case volume, average settlement timescales and how much risk the business wants to retain. SET UP A does not provide funding itself — we introduce you to specialist funders and brokers.
What is housing disrepair funding?
- Disbursement funding
- A facility that pays case disbursements — expert surveyor fees, court fees, counsel's fees — as they arise, repaid from the settlement when the case concludes. Often paired with ATE insurance so a lost case does not leave the funder unpaid.
- Litigation finance
- Third-party capital that funds the wider cost of running claims, sometimes on a non-recourse basis where the funder is only repaid if cases succeed. Pricing reflects the risk the funder takes on the case portfolio.
- WIP and CFA book lending
- Loans secured against the value of a firm's work in progress — the expected future fees from a book of live CFA cases. This provides working capital for salaries, marketing and overheads rather than case-specific costs.
- The cash-flow problem it solves
- A disrepair department settling cases in 9–18 months must fund every case for that entire period. Without funding, growth is capped by cash on hand; with funding, the department can scale case volume in line with demand.
How it works in practice
- Facility set-up
- The funder assesses the firm's case profile, historic success rate and settlement data, then agrees a facility limit and drawdown criteria. Volume practices usually get a revolving facility rather than case-by-case approval.
- Drawdown and repayment
- Funds are drawn as disbursements arise or as a working-capital advance. Repayment comes from settled cases — either directly from client funds held on account or from the firm's receipt of costs and damages.
- Interaction with ATE insurance
- Funders almost always require ATE insurance on funded cases, because the policy covers disbursements if the case fails. The funder and the ATE provider are the two halves of the same risk structure.
- Cost of capital
- Pricing is typically interest on drawn funds, sometimes with arrangement or exit fees. The cost must be modelled against average settlement values and timescales — cheap funding on slow cases can still be expensive.
Who needs it?
- New housing disrepair departments
- A newly launched department has no settlement income for its first year or more. Funding is usually the difference between a viable launch and running out of cash before the first cases conclude.
- Scaling disrepair practices
- Firms increasing case volume need funding that grows with the book. A facility sized for 100 live cases will constrain a department trying to run 500.
- Claims management companies
- CMCs funding their own marketing and lead generation carry a different cash-flow profile, but still need working capital while referred cases settle and referral fees are paid.
- Firms exiting funder-dependent arrangements
- Established practices sometimes refinance to reduce cost of capital or escape restrictive covenants. The maturity of the WIP book determines what terms are available.
What to look for in a provider
SET UP A does not provide these services itself. We introduce you to specialist providers — the points below are what to assess them on.
- Funder with genuine experience of disrepair and CFA case economics
- Facility limit that matches your 12–24 month case volume plan
- Clear pricing: interest rate, arrangement fees, exit fees, minimum terms
- Recourse vs non-recourse structure and what happens on lost cases
- Compatibility with your ATE insurance scheme
- Reporting requirements and how burdensome they are operationally
- Security required — debentures, personal guarantees, assignments
- References from other firms the funder currently supports
Housing Disrepair Funding: frequently asked questions
7 questions we are asked most often. Every answer is written to be read directly, without marketing padding.
How much funding does a housing disrepair department need?
It depends on case volume and settlement timescales. Model the total disbursements and overheads carried across your live case book for the average life of a case — that carried cost is roughly the facility you need.
Is litigation funding regulated?
The funding market is largely self-regulated, though FCA rules apply to some structures and to the firms receiving funding. Take advice on the regulatory status of any arrangement before signing.
What is the difference between recourse and non-recourse funding?
Recourse funding must be repaid even if cases fail; non-recourse funding is only repaid from successful cases. Non-recourse is more expensive because the funder carries the litigation risk.
Do funders require ATE insurance?
Almost always. ATE insurance covers disbursements on lost cases, which is precisely the risk a disbursement funder would otherwise carry. The two products are designed to work together.
Can a brand-new department get funding?
Yes, though terms reflect the lack of track record. Funders look at the team's experience, the case acquisition pipeline and the ATE arrangements in place. Expect more security and tighter limits initially.
What happens to the funding if a case is lost?
With ATE insurance in place, the policy covers the disbursements. Without it — or outside the policy terms — a recourse funder will look to the firm for repayment.
Does SET UP A provide funding?
No. SET UP A publishes guidance and introduces you to specialist litigation funders, disbursement funders and brokers. We do not lend or arrange finance ourselves.
Need a quote for your firm or CMC?
Tell us what your housing disrepair department needs and we will introduce you to specialist providers.
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