Before Escalate, pursuing a commercial dispute used to be costly, lengthy and risky to undertake. Escalate was created as a smarter way to resolve commercial disputes, prioritising your cash flow by focussing on a quick settlement, removing upfront costs and minimising risk.
Many businesses don’t pursue commercial disputes because of high upfront costs, long delays and considerable uncertainty – but there is now another way.
Escalate was created by looking at each of the steps of the traditional dispute resolution process from our clients’ perspective and finding ways of improving them. The result is a completely new approach that focuses on your business cash flow.
There are no restrictions on the types of cases Escalate can tackle – bad debt, contractual, negligence, IP infringement etc. – and, importantly, they can revisit disputes that are up to three years old.
Escalate takes a completely fresh approach. Once an initial review has been completed, Escalate utilises a two-stage process: a period of intensive negotiation with corporate recovery experts targeting a settlement in under three months, and then, if necessary, litigation using specialist legal teams that are funded all the way to the High Court.
The Escalate approach gives you an opportunity to resolve disputes in a way that saves you money, time and hassle, and enabling you to get on with running your business.
How does the traditional dispute resolution process work? And how does Escalate compare with it?
Escalate, the ground-breaking commercial dispute resolution process, was named ‘Innovation of the Year’ at the 2020 Modern Law awards.
Parties are encouraged by the Courts to attempt to share full details of their claim and negotiate a settlement before beginning legal proceedings. However, there is no fixed time limit for negotiations to conclude and defendants are often incentivised to delay the outcome. Meanwhile your lawyers will typically bill you based on the amount of time they spend working for you, so the longer this period goes on, the more expensive it is for you.
You’ll typically need to make a considerable upfront payment before you begin litigation to cover the court fee for issuing the claim, as well as fees for the barrister and any expert witnesses you require. Legal fees, which are often calculated on the basis of the time spent on the case, will then need to be added. It’s not uncommon for the total of these bills to increase to the level of the damages that you’re claiming.
They begin negotiating on your behalf as soon as you engage Escalate, using experienced corporate recovery specialists to encourage the defendant to settle quickly in your favour, without the need for litigation. Allowing up to a maximum of three months for this negotiation.
If the defendant is unwilling to settle in this three-month timeframe, Escalate immediately begins preparing for litigation. They’ll take care of this process for you, paying the upfront fees and associated costs all the way up to a High Court resolution.
View the Escalate explainer infographic
An entrepreneur of a marketing company sold their business to a UK company with a US parent. They had agreed for three sums to be paid in stages over a two-year period; however the final instalment of £220,000 was unexpectedly not received.
The entrepreneur initially approached the parent company for an explanation, to which they advised there had been a breach of contract.
The entrepreneur then engaged a legal professional for support to explore the claim that there had been a breach of contract resulting in them withholding the final payment. During this process, approximately £20,000 was spent in legal fees in an attempt to recover the monies owed, however no progress was made.
Having failed to make any meaningful headway, the entrepreneur felt their only option may be to write off the monies owed to them. They then sought advice from their accountant in relation to the relevant tax treatment and their accountant informed them of Escalate and the case was engaged.
The case followed the normal Path A mediation process for the full three-month period before moving to Path B, the litigation stage.
Aware that there was no legal merit to justify withholding payment, the defendant tried to delay the process by threatening to counter-claim, requesting to switch the case from a regional court to London, and asking for an extension to the courts for submitting a defence. All of these tactics were employed to frustrate the claimant and increase ongoing costs so they would drop their claim.
As the claimant bore no financial risk through the Escalate process, these attempts to dissuade them from pursuing their case had no impact – in fact, they served to increase the defendant’s own costs. This resulted in the defendant’s lawyers contacting the Escalate team to inform them that costs had now become prohibitive for the defendant, requesting mediation.
The mediation was held but without any settlement reached. It became clear in the mediation that there was no defence for withholding payment and the mediation was another attempt to delay or force the case into a low settlement. This was not achieved and Escalate continued to push for a full settlement.
Six weeks after the mediation the case settled at £290,000. The total cost to the defendant – including their legal fees – in their pursuit to delay the claim amounted to be circa £400,000.
Typically due to a combination of considerable upfront costs and legal bills which are based on the amount of time your lawyers spend on the case, accompanied with long delays (a typical case may take as long as 18 months to reach a conclusion). Alongside these issues, there may also be significant uncertainty of the outcome of the case and the total cost of pursuing a case with an uncertain outcome can deter many businesses. Escalate directly addresses all of these issues, removing the barriers that currently prevent businesses from fighting their corner.
Why do disputes take so long to resolve?
Unfortunately, the current system creates and allows bad business behaviour. There tends not be a strong incentive for the defendant to settle quickly in a traditional dispute resolution process; by delaying the outcome for as long as possible, they increase the chances of the claimant giving up or running out of funds. The Escalate process targets a result in less than three months by employing a team of experienced dealmakers to negotiate on your behalf.
Even if you can find a lawyer to act for you on a ‘no win no fee’ basis, you’ll still have to pay up front for some costs (such as court, barrister and experts’ fees), which can total tens of thousands of pounds and are not recoverable if your case is unsuccessful. You’re also likely to have to pay some or all of the defendant’s legal fees if you lose your case, unless you take out insurance. The traditional dispute resolution process typically takes 18 months to resolve; Escalate targets a solution in just three months. The Escalate process has brought together the professional advisers needed to resolve your dispute, and protect your financial risk in one seamless service. Escalate is unique and there is no similar service that prioritises your cash flow by focussing on a quick settlement, removing upfront costs and minimising risk.
There are no restrictions on the types of disputes Escalate can tackle – bad debt, contractual, negligence, IP infringement.
Escalate work with licenced corporate recovery specialists with a track record of rapidly recovering assets on behalf of claimants. This encourages the defendant to settle quickly in the client’s favour without the need for litigation. They follow a pre-agreed protocol that incentivises the defendant to settle quickly. We believe that this approach is likely to secure a better deal for Escalate clients.
I have a dispute from two years ago that I decided not to pursue at the time. Can I use Escalate?
Yes. We can revisit disputes that are up to three years old, enabling businesses to start to recover monies that were previously written off and providing an unexpected cash flow injection if successful.
Escalate work with a panel of specialist law firms that are regarded as experts in the field of dispute resolution. If your existing lawyers are not on that panel, they can apply to join by contacting us.
Escalate charges a fixed fee of 30% of the amount recovered, ensuring you will receive at least 70% of the damages received.
Everything is included in this fee, including upfront costs such as court fees and expert witness and barrister fees, so you have complete transparency and certainty from the very start of the process. And remember that you don’t pay unless there is a successful outcome.
In contrast, we estimate that a £200,000 dispute undertaken through a traditional mechanism would incur costs of over 50% of the recovered amount*. The costs will increase further if you take out insurance to protect yourself against the defendant’s costs in the case of an unsuccessful outcome. In these circumstances, it is possible that you could end up with as little as one third of the original value of the claim under a traditional dispute resolution approach.
* Assuming a 70% recovery of damages and 50% recovery of costs from the defendant
In a traditional dispute resolution process, you’ll be liable for your own costs plus at least part of the defendant’s bills if you lose your case. Escalate removes the financial risk – you don’t pay out unless they reach a successful settlement. If your case is unsuccessful, you won’t be required to pay the defendant’s costs either because of Escalate’s built-in insurance cover.
Contact us today to find out more about how we can help you
It’s important to react to any financial issues in your business quickly. We’re here with all the professional advice and support you need to tackle any issues head on.
When you or your business is facing financial difficulty, it’s important to react quickly to improve the outcome and lessen the impact.