The Process

Normally what happens is as follows:

  • If required, Teras and the claimant will enter into a confidentiality agreement at the outset of their discussions or, in any event, before any confidential information is provided to Teras;
  • The claimant or its lawyer sends to Teras the basic information on the case. This should include details of the parties, the background, the lawyers involved (if any) and should include supporting documents relating to the case and its quantum, any legal opinion or advice on the case and any relevant issues, material source documents, a chronology and list of relevant parties and any existing court papers. To ensure that Teras can perform due diligence, it is important that it has complete access to all information held by the claimant or the claimant’s lawyer that might be relevant to the claim and Teras’s decision to provide funding;
  • Teras reviews the  basic information sent, and requests further information if required;
  • Based on the information received, Teras will make a decision on whether to provide funding and/or whether it requires further investigations, reports or advice to be provided. It normally seeks to make a decision within 3 weeks of receiving all required information;
  • If the case is to be funded, Teras will make an offer of funding, by sending a funding agreement. Each funding agreement is different because no case is the same, although typically it will contain the following:
    • that Teras will pay the fees of the lawyers and pay any adverse costs order. Teras may also provide security for costs if security for costs is ordered by the Court. In return, Teras receives a share of the recoveries and is entitled to be paid its fee and project management fee, and the costs it has paid, from the recoveries;
    • Teras’s fee is normally a percentage of the settlement or judgment proceeds, subject to a minimum % return which reduces the earlier the case is resolved. Factors affecting the percentage include the level of legal fees and disbursements expected to be incurred, the strength of the case, the likely capacity of the defendant to meet a judgment and  the time it will take for the case to be completed;
    • if the case is lost, Teras receives no fee.
  • The funding agreement will typically provide for funding to be provided in stages. For example, an initial amount of funding may be committed by Teras in the early stages of the case in order to make further investigations of fact, law or procedure, such that Teras can then decide whether to continue its funding of the case once it has received further information