Litigation Services
We offer valuable help in managing contentious liabilities on the balance sheet in a transactional or in a non-transactional situation.
What is a litigation funding?
Litigation funding is where a third party provides the financial resources to enable costly litigation or arbitration cases to proceed.
The litigant obtains all or part of the financing to cover its legal costs from a private commercial litigation funder, who has no direct interest in the proceedings. In return, if the case is won, the funder receives an agreed share of the proceeds of the claim. If the case is unsuccessful, the funder loses its money and nothing is owed by the litigant.
Because the litigation funder’s return is tied to the success of the case, funders look to fund cases with good prospects of success.
The funders’ share of the proceeds of a successful case is negotiated with the litigant at the outset.
The financial reward typically consists of either a percentage of the damages recovered, or a multiple of the amount advanced by the funder, or a combination of the two.
This financing tool provides a valuable means of access to justice for claimants who may not have funds available, or may not wish to tie up funds, for costly yet meritorious claims. Its application is currently limited to commercial cases of a high value, and it is not yet suitable for consumer cases, personal injury cases or claims that do not carry a sufficiently high level of damages.
The legal framework
Litigation funding is permitted under statute, case law or public policy across the world. Our consultants are available for assessment of our clients' local litigation funding needs in disputes all around the world.
The role of funding intermediary
The litigation funding industry has grown rapidly around the world, in the past decade.
The advice to claimants and their representation is therefore to ask potential funders whether they are intermediaries or whether they have immediate access to funds.
The growth of litigation funding is to be encouraged as a means of ensuring access to justice by allowing corporations and others with meritorious claims to conduct litigation in a way that does not put undue strain on balance sheets.