Many businesses are unaware of the options available to them when it comes to commercial litigation funding. Some companies can be deterred from pursuing a legal claim due to the lack of funds available to finance legal fees and disbursements.

Fortunately there are now a range of solutions to help businesses pursue their commercial litigation cases by making funds available to finance legal fees and minimising the financial risks associated with taking a claim to court.

Commercial litigation funding (also known as third party funding or litigation financing) is fast becoming an essential for medium and large businesses involved in commercial disputes. It is now more readily available to smaller sized businesses too.

How Does Litigation Funding Work?

For companies pursuing a case which has a good chance of success, usually upwards of 60%, a funder may choose to finance the legal fees and disbursements in exchange for a success fee if the case is won.

This arrangement benefits not only those companies who may not have the capital to fund the case themselves but also those who prefer to keep the costs of litigation as an off-balance sheet expense. If the case is lost, the amount invested by the funder is also lost. This reduces the financial risks carried by the company pursuing the case.

Within the UK market alone, there are a wide range of funders who all offer very different financing terms and varying success fees. To effectively navigate this complex market many solicitors and businesses use the services of a litigation funding broker who can submit cases to a number of funders and present a range of solutions best suited to the client’s case.

Categories: Legal

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