Litigation Funding: Tips for Choosing a Funder

Third-Party Litigation Funding — also known as Litigation Finance — is a popular way to finance large litigation claims, particularly where cash flow is a concern. A funder with no prior connection to the case agrees to finance some or all of the legal costs in return for a fee from any recoveries.

When choosing a funder, consider their level of experience, the percentage of recoveries they require (usually 30%–50%), their solvency and reserved capital, the speed of their decision-making, and the level of control they wish to retain over settlement decisions.

Funders carry out detailed due diligence before committing. They will want to see strong prospects of success and a defendant capable of meeting the judgment, costs and interest.

Funding is not appropriate for every case, but where it fits it can be transformative — allowing claimants to pursue strong claims against well-resourced opponents without putting their business at risk.