Frequently Asked Questions about Escalate:
What is the issue ?
- The commercial dispute market for small or medium sized organisations is broken and does not work. The cost for resolving a dispute or pursuing a bad debt is prohibitive for most – even if you can afford to pursue it you can’t always justify the additional cash outlay. Many businesses now don’t even turn for professional help but simply give up and write off once their own attempts have failed.
- An example of this came from the 2018 Legal Services Board report which showed that businesses with employees of 1-50 had stopped turning to advisers for help. The report found that 9 out 10 of these businesses would no longer turn to lawyers for help due to both cost and trust, and instead write off the problem and any cash owed. The Legal Services Board (the regulator) stated that more than £40 billion was written off every year by this group of businesses due to commercial disputes not being sorted.
- MemNet has many members that would fit within this group and have many future members that may also fall into this group – this is real – organisations are burying their disputes and with it significant cash. This problem is not restricted to the smaller companies either – the bigger the client usually the bigger the quantum in dispute so just as painful if not more!
- Escalate was created to remove the barriers that were preventing access to justice for small and medium sized organisations. Escalate was created to repair this broken market and in doing so do create new liquidity and stronger cash flow for businesses. Escalate is not a distressed service but a pro-active cash flow solution and tool for businesses in navigating their trading bumps in the road.
What does Escalate do ?
- Escalate can be used to help a business resolve a dispute or recover a debt.
- Escalate is not restricted on the size of the problem or debt. It has supported the recovery of small debts and the settlement of million pound disputes.
- Escalate can handle any sort of commercial dispute. Property, IT, Construction, Contract, Intellectual Property and insurance policy – most business would not perhaps consider an insurance policy rejection to be a dispute – in reality it is nothing more than a contract dispute.
- Escalate does three important things for the clients:
- Removes the clients financial risk in resolving the dispute. Client pays nothing until successfully resolved – including protection for any adverse costs should a matter not be resolved. A client therefore has nothing to lose in using Escalate and everything to gain.
- Escalate brings together the talents of accountants and lawyers to drive a quick settlement process. Escalate targets money back within 3 months and if no success will look to push straight into litigation to drive a settlement. (Might be worth stating that at present Escalate is seeing many disputes move into the first stage of litigation on the basis the defendant thinks the case will disappear/give up so when we don’t and we issue proceedings they come running back to the negotiation table).
- Escalate has a fixed and transparent fee structure. Escalate’s fee is 30% of any damages/debt recovered (regardless of size). Escalate covers off all upfront costs of litigation including court fees, counsel fees, expert fees along with providing protection for any adverse costs should a case fail. Escalate ensures the client always remains the main beneficiary of any award (70%) which can’t always be guaranteed via alternative dispute resolution solutions. (might be worth stating that the structure of the fee was done to change the behaviours of the lawyers and drive quicker recovery and therefore cash flow for the client. E.G under the normal process a lawyer might be paid for the costs incurred so the more letters that went out and the more time spent on the clock the bigger the bill and their fee – under Escalate we don’t get paid unless there is a success and until there is a success. Also, as Escalate covers off all of the upfront costs the team is incentivised to drive a settlement quickly to avoid spending lots upfront as that might drive more profit from the 30%. It is a complete reverse in the reward structure – and one that benefits the client massively).