Litigation and Legal Costs Funding

What Is Litigation Funding

Litigation funding –  when an investor pays the bills of a claimant in a lawsuit and in exchange, shares in the settlement (if the case succeeds); if no success, then the claimant does not have to repay the investment.

Litigation funding is not a loan, it is a co-payment or investment. The investor takes on all the legal costs of litigation, on a non-recourse basis and in return receives a share of the settlement.

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Litigation finance is for claimants’ legal costs and can also be for the ‘other party’s’ costs, as well as Orders of Court, security costs, or interlocutory costs, arbitration panels costs, settlement advances and other legitimate related legal costs.

Lawsuit advances are non-recourse investments, which enables corporates and individuals to de-risk a claim by eliminating legal costs, totally.

Having a financially powerful lawsuit funding company on your side, prevents the ‘other side’ from using delaying tactics, running up unnecessary costs or demanding excessive security, in the hopes that you will not continue with your claim.

Lawsuit funding companies understand litigation and are financially committed because they have a vested interest in your claim. They are prepared for long term legal battles and have large resources they can draw on. This benefits your case.

Litigation funders are financiers and not litigators and so they respect the claimant’s choice of law firm and legal team. No need for you to change your attorneys, solicitors, advocate or legal team.

Cost Schedule

  • Minimum Term – 6 months
  • Maximum Term – 36 months
  • Minimum APR – 13 %
  • Maximum APR – 30 %

Example :

  • Loan                         R 1 million
  • Term                        R 1 year
  • APR                           13 %
  • Repayment              R 1 130 000

Subject to lenders Terms and Conditions at time of quote.

 Litigation finance is applicable in :

  • any jurisdiction or any number of jurisdictions
  • at any stage of the legal process, ( before, during or after )
  • for claim amounts over USD 1 million
  • arising out of any contract, statute, treaty or tort
  • against any individual, government, quasi-government or company.

Cash-Flow
You do not use your own cash to fund the litigation process. The lawsuit investor pays for all legal costs, arbitration costs, securities, guarantees, investigations etc,  as and when they arise.

Note : Disputes relating to personal injury, divorce and defamation are not able to be funded.

Types:
Claims over USD 1 million, arising from a dispute or breach of any agreement, contract, statute, treaty or tort, against an insolvent or solvent ‘other party’, and at any stage of the pre-legal or litigation process :

  • Breach of lease
  • Licensing agreements dispute
  • Wrongful government conduct
  • Copyright and Trademark infringements
  • Unfair trading Commercial transaction
  • Trade finance disagreement
  • Competition violation
  • Promissory notes
  • Anti-trust misbehaviour
  • Insurance claim

FAQ

What countries and jurisdictions

Any part of the world in any jurisdiction or any number of jurisdictions.

What claim amounts

Claims upwards of USD 1 million and Legal Costs of USD 100 000 (or equivalent currency), with no maximum amounts.

How much does it cost

The legal funding companies share in your claim settlement. Some elements which determine the costs are, the risk profile, the expected duration of the legal process, the settlement amount, the expected legal costs and other factors. Each case is determined on its own merits. The fees are negotiated and agreed to by all parties to the agreement.

At what stage of the legal process

At any stage; before, during or after conclusion of the case. For example, if a claimant is contemplating litigation but does not have funds, pre-litigation investments can be made, if the case has been concluded but settlement is awaited, then pre-settlement arrangements can be made.

Who controls the legal process

You, the claimant, controls the process. If you need any assistance, then you may call on the company that has provided money for guidance but you remain in control.

Confidentiality

It is in the funder’s interest to keep all information very confidential. The legal cost funder is on your side. He stands to lose if your case is compromised in any way. Confidentiality is therefore key to success. Non-disclosure agreements can be signed to guarantee this.

Where does the money come from

There is a pool of very wealthy companies and individuals ( who invest in these companies), that provide the litigation funds. They expect a return on their money for taking a risk however, they understand that returns are not guaranteed, because when a case is lost, they lose their investment.

How do I know that the legal bills will be paid

An agreement setting out who is responsible for payment will be entered into. You are dealing with very credible investment companies that specialise in this business and so their reputation is paramount to their existence and prosperity.

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