If a claim is solid enough, everyone can benefit from litigation financing.
Plaintiffs are aided by not only getting to keep their cases active until a conclusion is reached, which can take years, but also by getting to take some of the financial pressure off. Through immediate access to capital, plaintiffs can cover their stiff and ongoing legal, personal, or business expenses. Using funding as a means of redistributing risk and mitigating costs is also becoming a popular practice, as claimants will still retain a majority of the estimated settlement or recovery, but will not face repercussions if the suit doesn’t result in their favor.
The law firm or attorney has the opportunity to take on a broader spectrum of litigants that wouldn’t be able to pay for their representation under different conditions. It assists them in achieving justice, fairer rulings, and reduces the chances that their client will abandon their case. Most legal practitioners who have utilized litigation financing would use it again.
Investors have the potential to make millions off of other people’s lawsuits and participate in a new asset market. Litigation funding doesn’t function like a loan, but more like an asset purchase. This makes it separate from the capital market, and thus advantageous for portfolios in need of variety. Seasoned, connected funders can push strong cases forward and ensure that they are properly financed for a just court ruling, helping them to see their returns sooner. Additionally, the ROIs are much more tempting than they are in other alternative asset markets.