Lands first, in full
Data requests, expert input, scheme fees and staff time are all incurred long before any settlement is agreed.
Legal claims funding / Private credit / United Kingdom
Every claim was paid for long before it paid out.
Fixed return0%per annum
Term0months
StructureSecuredloan note
Recourse Capital funds the legal work behind UK redress claims, and is repaid from the fees those claims produce on settlement.
A fixed-term, secured position in that funding line. No listed-market exposure, no performance fee.
Capital at riskReturns not guaranteedEligible investors only
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Overview
The whole thing,
in six answers.
Most private credit material takes forty pages to say what fits on one screen. Everything after this section is detail.
What is itA secured loan note issued by Recourse Capital. It pays a fixed coupon and returns your capital at the end of the term.
What funds itThe cost of preparing legal claims under UK redress schemes — evidence, expert reports, court and scheme fees.
Where the return comes fromOn settlement the acting firm recovers its costs and fees. Those receipts repay the note, ahead of the issuer’s own profit.
What you receive20% per annum fixed over 12 months, capital repaid at maturity. Coupon monthly or rolled, your election.
What secures itA debenture over the issuer and an assignment of the fee receivables, held by an independent security trustee.
What can go wrongClaims can fail, settle late, or settle for less. Security is not a guarantee, and the note is illiquid for its term. The full risk section is here.
Figures are illustrative and drawn from the offer documents. Nothing here is an offer, an invitation, or advice.
Why it exists
A working-capital gap
with a legal outcome
attached to it.
Redress is a paperwork problem before it is a money problem.
When a redress scheme opens, liability is largely settled at the policy level. What remains is proving, claim by claim, who is owed what — documents obtained, evidence assembled, submissions drafted to a deadline.
Contingent, but priced
Recovery is uncertain on any single file, but scheme fee scales are published, capped and predictable across a book.
Banks price it badly
A receivable that depends on a legal outcome does not fit standard lending criteria. Specialist capital fills it.
How it works
Four movements,
one round trip.
Capital leaves, does a specific job, and comes back on a date. The diagram tracks with you as you read.
Movement01 / 04
You subscribe to the note
Movement 01 Day zero
Subscription
The note is issued in your name. You choose how the coupon is paid: monthly into your nominated account, or rolled and settled with capital at maturity.
Movement 02 Weeks 1–8
Deployment
Capital is released file by file against a budgeted preparation cost. Each drawdown is tied to an open, identified claim.
Movement 03 Months 2–11
Progression & settlement
Claims are submitted and assessed. On settlement the acting firm recovers its costs and disbursements alongside the claimant’s award, and those receipts are swept to the issuer’s collection account.
Movement 04 Month 12
Repayment
Coupon is paid on schedule and principal repaid at maturity from collections. Noteholders sit ahead of the issuer — the residual is what remains after the notes are made whole.
The economics
Where the money
to pay you
actually comes from.
A fixed coupon is only as good as the cash flow behind it. Here is the arithmetic, including the point at which it stops working.
The model runs on £100,000 of notes. Illustrative, not a forecast — but the structure is exactly how the money moves.
Coverage model / per £100,000 of notes
Illustrative · not a forecast
Coverage of amounts due
Covered
1.17×
Collections cover the coupon and capital 1.17 times over. The buffer is the margin for late or failed files.
Break-even sits at a 70.5% settlement rate. Below that, collections no longer cover coupon and capital in full. It is stated plainly because it is the number that decides whether you get paid.
Gross fee recoveries
£168,000
Issuer operating costs
−£28,000
Available to the notes
£140,000
Due to noteholders
£120,000
Files funded40At £2,500 budgeted preparation cost each.
Files settling32At the settlement rate you have selected.
Recovery per file£5,250Costs and disbursements under the scheme scale.
Headroom+£20,000What is left after the notes are made whole.
Timing hurts before outcome does
A file settling in month fourteen rather than month ten does not reduce the recovery — it reduces the ability to repay on the maturity date.
Forty files, not one case
No single file is large enough to break the coverage ratio on its own. That is what separates this from single-case litigation funding.
You are paid before the issuer
The residual line is the issuer’s profit, and it is last in the waterfall. Underperformance is absorbed there first, until it is exhausted.
Your position
What it looks like
from your side.
Move the amount. This is what the note pays and when, assuming it performs to its terms.
Illustrative return schedule
Coupon rate20.0%Fixed for the term. Not compounded.
Monthly coupon£1,667Paid on the same date each month.
Total coupon£20,000Across the full twelve-month term.
Total received£120,000Capital plus coupon, if the note performs.
Month twelve carries the capital repayment. Coupon figures are gross; tax treatment depends on your circumstances.
Protections
What stands
behind the note.
Security improves recovery. It does not create certainty.
Each is documented in the security trust deed. Take your own advice on what they are worth in a downside case.
i
Debenture over the issuer
A fixed and floating charge over the issuer’s assets, registered at Companies House and held on trust for all noteholders equally.
ii
Assignment of fee receivables
Receivables created by the funded files are assigned into the security, so noteholders have a claim on the cash flow the capital produced.
iii
Independent security trustee
An unconnected trustee holds and, if required, enforces the security. Noteholders need not act individually to be protected.
iv
Defined use of proceeds
Drawdowns are permitted only against identified, opened files at a budgeted cost. General corporate use is outside the permitted purpose.
v
Collection account discipline
Receipts are swept to a designated collection account and applied to the notes ahead of any issuer profit.
vi
Quarterly noteholder reporting
Deployment, settlement volumes and collections are reported quarterly, so performance is visible before maturity rather than at it.
Key terms
The terms,
on one page.
Summarised from the information memorandum. Where this page and the offer documents differ, the documents govern.
| Instrument | Secured fixed-rate loan noteIssued by Recourse Capital Ltd, England and Wales |
|---|---|
| Return | 20% per annum, fixedSimple, not compounded. Paid monthly or rolled to maturity at your election. |
| Term | 12 months from the date of issueIssuer may redeem early at par plus accrued coupon. |
| Minimum subscription | £25,000Increments of £5,000 thereafter. |
| Security | Debenture over the issuer and assignment of fee receivablesHeld by an independent security trustee for all noteholders. |
| Use of proceeds | Preparation costs of identified legal claimsDrawn per file against a budgeted cost. Not general working capital. |
| Priority | Notes rank ahead of issuer profit distributionResidual is paid only after the notes are made whole. |
| Liquidity | None. The note is illiquid for its termNo secondary market. Assume you cannot access the capital before maturity. |
| Reporting | Quarterly noteholder statementDeployment, case volumes, settlements and collections. |
| Eligibility | Certified high net worth, sophisticated and professional investorsSelf-certification is required before offer documents are released. |
| Fees to investor | NoneNo entry fee, exit fee or performance fee is charged to noteholders. |
Risks
The reasons
this could not work.
If any single item here is unacceptable to you, the rest of the page does not matter.
R1Your capital is at risk
You may get back less than you invest, or nothing at all. Not a deposit; not FSCS protected.
R2The return is not guaranteed
A fixed coupon is a contractual promise, not a certainty. It is only as good as the issuer’s ability to pay.
R3Settlement rates may disappoint
Below roughly a 70% settlement rate, collections stop covering coupon and capital in full.
R4Timing may extend past maturity
A delayed settlement is still a shortfall on the day the note falls due.
R5Recovery per file may fall
Fee scales or scheme mechanics can change, reducing the amount received on each settled claim.
R6Security is not a guarantee
Enforcement takes time and cost, and realises whatever value exists then — possibly far less than the amount owed.
R7The note is illiquid
No secondary market, no right to early redemption. Assume capital is committed for the full term.
R8Regulatory and scheme change
Schemes sit in a policy framework that can be revised, narrowed or closed, affecting claim volume and value.
R9Key person and operational risk
Performance depends on a small number of people, and on the acting firms running files to deadline.
A summary only. The full risk factors are set out in the information memorandum.
Suitability
Who this is for —
and who it isn’t.
We would rather lose a subscription than take one from someone this does not suit.
A reasonable fit if you
- Already allocate to private credit or other illiquid, fixed-term positions
- Are a certified high net worth, sophisticated or professional investor
- Are placing capital you will not need inside twelve months
- Want income not priced off equity or rate markets day to day
- Will read the memorandum and take your own professional advice
- Understand that a fixed coupon and a certain coupon differ
Not for you if you
- Need access to the capital, or any part of it, before maturity
- Are investing money you cannot afford to lose in full
- Are looking for a capital guarantee or FSCS-protected return
- Want a daily price, a valuation, or the ability to sell out
- Are a claimant looking for help — this is not that
- Do not meet the eligibility criteria for these materials
Questions
Asked before,
answered plainly.
The questions that come up on almost every first call. If yours is not here, ask it directly.
No. You subscribe to a note issued by Recourse Capital Ltd. The issuer contracts with the acting firms; you contract with the issuer. Your security is over the issuer and the receivables assigned to it.
The coupon is fixed; the recovery is not. The issuer absorbs the variance and keeps the residual when performance is good, and the note is repaid before that residual. Coverage on the modelled case is 1.17 times, and the break-even rate is on this page so you can judge the buffer yourself.
Nothing, individually. Capital spreads across roughly forty files per £100,000, and the model already assumes a fifth do not settle. What matters is the rate across the book.
No. There is no secondary market and no investor right of early redemption. Subscribe on the basis that capital is committed for the full twelve months.
An unlisted loan note of this kind is not a protected deposit and is not FSCS covered. Materials go only to investors who meet the eligibility criteria; the regulatory position is set out in the offer documents.
Coupon is generally treated as interest, and treatment depends on your circumstances and residence. We do not give tax advice — take it from your accountant before you subscribe.
The information memorandum, key terms, security trust deed summary, full risk factors and the subscription form. No one calls before you have read them unless you ask.
No. Recourse Capital funds legal work; it does not act for claimants or give legal advice. Speak to a solicitor or the scheme administrator.
Before you decide
Read the arguments
against it too.
Four short pieces, none written to sell you anything.
PrimerWhat legal claims funding is
Where the asset class came from, and the difference between funding a case and funding the work that prepares it.
ComparisonAgainst private creditHow a claims-backed note behaves next to direct lending and asset-backed paper on duration, correlation and downside.
ChecklistTwelve diligence questionsThe questions to put to any issuer offering a fixed return on a contingent receivable.
BriefingHow these deals failFailure patterns in unlisted notes: undisclosed leverage, working-capital drawdowns, coverage ratios that were never there.
Investor pack
Request the
documents.
Three short steps. The pack is released once eligibility is confirmed, usually the same working day.
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What arrives in your inbox
- Information memorandum, in full
- Summary of key terms and the coverage model
- Security trust deed summary
- Risk factors, unabridged
- Subscription form
No obligation, and no call before you have read the documents. Details are handled confidentially.