The decision handed down by the High Court last week has been described by legal experts as ‘groundbreaking’. Previously interest costs on a judgement accrued at a ‘standard rate’ of 8%, however this case now provides that a winning party to a lawsuit can be entitled to a full recovery of the interest they pay on any borrowings to fund the lawsuit.
Managing Director of Montello, Christian Faes, commented:
“As a bridging lender we always want to ensure that a borrower is borrowing from us for a viable commercial purpose – and we believe that commercial litigation is one such purpose. Over the course of the last year or so, we have increasingly seen borrowers coming to us to fund litigation expenses.
"We always require real estate security for the loan, but often mainstream lenders will not be interested in funding litigation costs. We are more than happy to lend in these circumstances.”
“The High Court’s decision in this case, reflects the commercial reality of the current times.
"Many borrowers have very viable commercial reasons to require a loan, but struggle to get funding quickly. This Court decision, in some respects, recognises the increasingly mainstream role that bridging finance is playing in the marketplace.”
