Service: Forensic Accounting and Expert Witness 

Sector: Construction FinTech Hospitality Property Retail 

Topic: Company news 

Litigation Funding - Not just a means to an end...

By Carl Lundberg

09 May 2018

It is generally accepted that more than 90% of cases which are earmarked for the civil courts are settled ahead of trial or arbitration.

This means that parties involved in legal proceedings are having to settle at the point of ‘satisfice’; that is the point at which they have had to make a sacrifice to accept a position that will merely suffice, but not satisfy the original objective. I have no doubt that in many such cases, at least one of the factors involved in this satisfice decision is the risk of incurring significant further costs by taking the case through to trial or arbitration and ultimately losing, resulting in the money being lost and facing a possible adverse cost award.

This is where litigation funders step in - these businesses fund legal claims through the courts with the objective to recover costs and/or damages for their clients. These businesses offer finance to fund cases to both plaintiffs and defendants on a case-by-case basis. The decision as to whether a case is taken on is based on their assessment of the chances of success of the relevant party’s case. This enables the party to share or remove the risk associated with incurring costs to proceed to trial or arbitration, without having to give up on the potential upside of an out-and-out win. Of course, the funding does come at a cost, which is usually negotiated and agreed upfront and which can vary significantly depending on various factors including, but not limited to; the proportion and level of costs to be funded, the degree of uncertainty around the prospects of success, and whether there is any recourse in the event the case is lost. However, usually the cost is only payable in the event of a win at which time most would be pleased to pay out a share.

For those facing litigation with concerns about the level of costs and risk of losses involved, litigation finance may be the answer. If you would like to discuss a case for which you might require litigation funding, please contact your usual Gerald Edelman contact or Carl Lundberg at, or on 020 7299 1415.

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