Top things to know about litigation finance
Litigation or law firm finance has evolved and is currently undergoing regulatory review to shape its next stage of evolution. So what do you need to know?
It’s evolved
Historically, litigation funding was unlawful; however, it’s now commonly used in arbitration and litigation in England and Wales to fund a variety of disputes. These can range from personal injury litigation to commercial litigation. The courts are increasingly approving various forms of law firm finance from providers like https://www.novo-modo.co.uk/commercial-finance-Legal-Firms, so long as agreements are compliant and properly funded. This legal finance is broadly supported by the courts because it can improve access to legal services and justice.
What is funded with law firm finance?
Litigation finance can cover the costs of legal fees, court fees, expert costs and liability for the costs of the other side if a claim does fail. Funders can terminate their involvement if the likelihood of a case being successful changes.
Funders get nothing if you lose
Litigation funding is offered on a non-recourse basis, which means that the litigation funder gets nothing if you lose and a return of their investment if you win. Applicants only repay if they win, from the damages that they are awarded.
What do funders look for?
Funders need to be sure that the case is worth pursuing from their perspective. Usually, the counsel’s opinion will need to be that the claim has a 60% or more chance of being successful. Without this, the litigation finance firm is unlikely to agree to provide finance, as they won’t make a return.
