Unregulated company uses AI to offer customers a debt repayment guarantee

Jones: a boon for access to justice

An unregulated law firm uses artificial intelligence (AI) to offer businesses a “highly automated” debt collection service that combines “no win, no fee” with a guarantee that debts of up to £5,000 that goes to court will be reimbursed, by the company if not the debtor.

Lee Jones, managing director of Caresso Law, said he was using “very advanced” AI to create an environment in which “tens of thousands” of business debt could be handled with “very little human involvement”.

He said Caresso provided funding and insurance for the cases and licensed its technology to two law firms in the UK and several others in France, which he did not want to name.

When legal proceedings were initiated, customers were guaranteed that debts of up to £5,000 or €5,000 would be repaid by Caresso if the debtor failed to pay.

When a case did not reach court, Caresso regularly assessed it and, if the debtor could not afford to pay, the case could be referred to the client, but without costs or charges.

Mr Jones said Caresso’s revenue would come from interest payable on debts, statutory late fees and any costs recoverable from the other side. He said any debts involved must be commercial debts and not involve individual consumers.

“We may have made a big mistake with that, but I don’t think we did,” he said. “We believe this will be a boon for access to justice and give people who are in bad shape in their business the opportunity to recover their debts.”

He expected the new service to appeal to both small and large businesses.

Mr Jones added that Caresso was aiming to expand the service across Europe and that after licensing its technology to French law firms it was “in negotiations” with two firms in Spain.

Caresso Law was launched two years ago as a consortium marketing litigation that also involved bulk “first day” post-event insurance.

Mr Jones said he currently works with half a dozen UK law firms on low-volume, high-value commercial litigation, funded mainly by contingency fees but increasingly by agreements based on damages (DBA).

Despite the growth of DBAs, he said he didn’t expect them to overtake CFAs because it was “sometimes difficult to grasp all the risks of litigation at an early stage.”

He said the value of the cases ranged from £100,000 to “millions or even tens of millions”.

Mr Jones said Caresso Law pulled out of work for bodily injury and medical negligence at the end of last year.

When launched, the unregulated firm set its sights on personal injury as well as commercial litigation, working with firms specializing in IP.

However, Mr Jones said that despite handling a “number of cases with good results”, Caresso had found personal injury to be an “incredibly aggressive” market, with fierce competition and downward pressure on the prices.

The firm has had more success in commercial litigation, using several law firms that until now had little experience in “no win, no fee” commercial litigation.

Tana T. Thorsen