Whether you need to bring or fight a claim we can tailor a litigation funding solution to suit your individual requirements.
What is litigation funding?
Litigation funding is the financing of legal proceedings, on a non-recourse basis. Money is loaned to plaintiffs, lawyers, and businesses on the condition that the particular claims profits are the only assets out of which the lender is legally obliged to recover the loan from.
The practice has been around for centuries however modern-day litigation funding began in Australia in the early 90s and has played an important part in the commercial legal sector ever since.
Types of litigation funding
Some of the most common types of funding include:
- conditional costs agreements (CCAs)
- adverse costs insurance (ACI)
- third party litigation funding (TPLF)
Conditional costs agreements CCAs
Conditional costs agreements provide a pathway to justice and legal representation for those whose financial situation would otherwise prohibit them from making a claim.
A CCA is a legal document which details what happens if a plaintiff wins or loses their claim. CCA’s are not a legal right and are commonly marketed as No Win No Fee or No Win No charge guarantees. Such agreements undergo little to no regulation and often lead plaintiffs to believe that 100% of their legal fees are covered in the event of an unsuccessful outcome when in most cases they are not.
CCA’s are commonplace in the personal injury sector however are becoming increasingly offered in other legal areas such as wills and estates and divorce law.
Learn more about CCAs and No Win No Fee here.
Third-party litigation funding
Third-party funding is when a party (not involved) in a dispute provides the capital necessary to fund a particular claim or dispute in return for a portion of the settlement or judgment. Depending on the size and nature of a legal matter, a third-party funder may agree to fund some or all of the legal costs associated with the matter.
Over the past decade, the practice has become more mainstream and created more competition between funding organisations. In turn, the market has evolved dramatically giving litigants more choice and fairer borrowing terms.
At Litifund when considering funding commissions, legal costs and the projected value of a successful claim before tailoring a funding package to best suit your needs.
For a free no-obligation consultation regarding your situation get in touch today.
Adverse costs insurance
Adverse costs insurance is a legal expense insurance policy taken out after an accident or incident which covers the policyholder(s) against several financial risks associated with litigation.
Without adverse costs insurance, plaintiffs can be liable to pay their own lawyer’s professional fees and disbursements as well as their opponent’s.
On the other hand, in a successful outcome, in most cases, the cost of the insurance policy will be deducted from the plaintiff’s final settlement or judgement.
To be eligible, like all types of litigation funding a plaintiff(s) claim must have legal merit. On application, the insurance company and plaintiff(s) legal representative carry out a strict risk assessment to determine whether the individual or class has a reasonable prospect of being successful.
What types of cases warrant funding?
Generally, any legal dispute which involves the borrower receiving monetary compensation may or may not be suitable for litigation funding
Some of the most common examples include:
- Class actions
- Commercial litigation
- Consumer disputes
- Financial services
- Infrastructure and Energy
- Intellectual Property
- Personal Injury