Litigation funding assumes the financial risk of legal claims in return for a share of the proceeds recovered.
Funders bear all costs incurred by the plaintiff, including fees payable to solicitors, barristers, courts and independent experts. In return, they receive a funding fee based on the recovered amounts, plus reimbursement for the costs outlaid. This allows individuals and institutions to extract value from unresolved litigation claims.
The funder only receives a return if the claim is successfully resolved. If litigation is unsuccessful, the funder still bears the costs. The litigation funder will also bear any adverse cost exposure in the event of an unsuccessful claim.
Litigation funding provides justice for plaintiffs with insufficient resources to pursue high value claims, and for those whose claims may be too small to pursue individually.
Victims of corporate misconduct have received significant compensation through litigation funding. Litigation funding also covers areas such as class actions, general commercial claims, arbitration claims, as well as asset recovery for the benefit of creditors of insolvent companies and individuals.