Legal disputes can be a nightmare in the commercial world, but in the UK, litigation funding can help alleviate some of the financial issues which these bring.
If the idea is new to you we suggest you check online for sources of litigation funding at sites such as this.
What is funded?
All disbursements, alongside evidence from experts and court and legal fees, are covered. Rest assured that if you fail in your case, any of the other side’s costs will also be covered.
You may be required to report to the funder about progress of the matter in an agreed format and subject to the terms of the funding arrangement.
Do you have to repay the funder?
If you lose the case, the funder cannot recoup their investment. However, should you win, you will need to pay the funder from damages you are awarded. The total amount may include a premium on the initial investment. The latter is subject to a 2023 Supreme Court decision on PACCAR. A Court of Appeal decision on the validity of agreements for litigation funding is expected by the end of July 2025.
What will a funder consider?
As funders are only paid back if a claim is successful, they will look closely at the merits of the case. Normally, you will have to offer Counsel’s opinion about your claim and show that likely damages will make supporting the claim financially viable to stakeholders.
Which companies use litigation funding?
Although it was typically a refuge for litigants who struggled meeting legal costs, it is now often used by solvent or wealthy companies who see it as a sensible option.
How are any damages split?
All funders will need to repay any damages awarded. It is important to have a pre-litigation agreement in place as to how this will occur.
Confidentiality and Privilege
A litigation funder requires information to decide on the merits of your case. Make sure you do not waive confidentiality or privilege when providing details of the case. Consider a non-disclosure agreement when sending information.
