In this arrangement, the litigation funder agrees to provide financial support to the claimant in return for a portion of the settlement or judgment amount if the case is successful. The funding is typically non-recourse, meaning that if the case is lost, the claimant does not have to repay the funds provided by the funder.
It can be utilized by individuals or businesses who lack the financial resources to pursue a lawsuit on their own. It can be used for various types of litigation cases, including personal injury claims, commercial disputes, intellectual property disputes, and class action lawsuits.
Some common reasons for seeking litigation case funding include:
1. Covering legal expenses: Lawsuits can be expensive, with costs including attorney fees, court fees, expert witness fees, and other related expenses. Funding can help cover these costs.
2. Leveling the playing field: Litigation case funding can provide access to high-quality legal representation and resources that might otherwise be unaffordable for the claimant, thereby leveling the playing field against well-funded opponents.
3. Funding ongoing business operations: For businesses involved in lengthy legal disputes, litigation funding can provide the necessary capital to continue operating and cover regular business expenses while the case is ongoing.
4. Managing personal finances: In personal injury cases, funding can help claimants meet their financial obligations, such as medical bills and living expenses, while awaiting a resolution.
While litigation funding can provide significant benefits to claimants, it is essential to carefully consider the terms and conditions before entering into a funding agreement. Some key factors to consider include the interest rates or fees charged by the funder, the potential impact on the claimant’s settlement or judgment amount, and any restrictions or conditions imposed by the funder.
It is advisable to consult with an attorney specializing in litigation funding to understand the specific implications and risks associated with litigation case funding for your particular situation.
