Disputes are a fact of life, but bringing dispute claims to court can be a hugely expensive process. This is what you need to know about litigation funding:
Litigation funding keeps evolving
Litigation funding was once unlawful, but it’s now commonplace in litigation proceedings and arbitration. Litigation funding can be used for various disputes, from personal injury to large-scale commercial disputes. So long as the funding agreement is compliant with existing case law, it can be enforceable. The courts are broadly supportive of the litigation funding industry, because this access to finance can boost access to legal and judicial services.
The nature of litigation funding
This type of funding can be used to cover legal fees, court fees, expert costs, and other disbursements, as well as liability for costs if the claim fails and the other party claims costs and damages. It’s important to understand the terms and conditions of your funding.
Funders get nothing if the claimant loses
Litigation funding is unusual in that it depends on a win. If you lose, the funder cannot reclaim their costs. This means you won’t have to repay the funder unless you make and successfully receive a recovery. However, the likelihood of recourse and the profit margin are factored into every litigation claim funding offer.
What funders look for
Funders need to know that the case is worth pursuing. Usually, they need counsel’s opinion that the claim has a minimum of 60% chance of being successful in gaining and obtaining damages. The damages also need to be sufficient for the funder’s margins.