The Costs of Litigation Funding Costs and Repayment to Consider When Looking at Litigation Funding.
How Funders Calculate Their Return
The funder’s return will be a percentage of the total award of damages or a multiple of the amount of the capital that they advanced. In the example of a £1 million award of damages, a 30% share for the funder would result in the funder receiving £300,000. It is therefore essential to read the terms of the funder’s proposed agreement very carefully indeed.
What Triggers Repayment
The key thing to note is that you will only repay the funds and interest if you win your case. In the vast majority of agreements entered into by claimants, the funder will bear the loss if the claim fails.
If the Case Is Lost or Settles Early UK Litigation Funding is covered in more detail at https://www.novo-modo.co.uk/litigation-funding.
A case that loses may result in the funder getting nothing out of the deal but having incurred their own costs. Early settlements are treated differently and most agreements will have a minimum return to which the founder is entitled even if the case has been settled for less than originally claimed.
Costs You Still Carry
While funding your legal costs, claimants are still liable for the other side’s legal fees should they lose their case. This is unless the claimant holds after-the-event (ATE) insurance cover, which can cost from a few thousand pounds to over £50,000 depending on the size of the claim and other factors. Information about how civil litigation costs and funding are treated in the courts is contained within practice guidance published by the judiciary.
Where to Learn More
This all helps to clarify the key points about the repayment before you commit to funding a case.
