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How Commercial Litigation Claims get Funded

How Commercial Litigation Claims get Funded
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Funding for Commercial Litigation Claims 

Commercial Litigation Funding is vital financing mechanism for many businesses involved in costly litigation. Without funding from third party funders many businesses would not be able to pursue litigation. Corporate Litigation Funding ensures businesses are not denied their access to justice as a result of their financial resources. If a business has a valid commercial litigation claim there will be third party funders interested in reviewing the case to see if it meets their risk profile. First a funder will need to be presented with the case formally. This in itself can be quite difficult as not every funder accepts applications from the public,  some not visible online and some only have specific requirements. The process of securing process itself can be quite daunting and complex and that is why claimants use services like Claims Funding to manage this process for them.

In order to apply for funding  The business and their legal representative will be required to complete application forms and supply copies of supporting documentation to verify the case. Depending on the complexity of the case this can mean supplying thousands of documents. Each litigation funding company will have a different risk profile and may use various underwriting and analysis processes to adequately review the case in question. Some commercial litigation claims funder even use AI Intelligence to review thousands of similar cases which have been litigated in order to put a quantifiable probability of success on the case from the outset.  Put simply, litigation funders will use a variety of means to assess how likely it is that the claimant will win the damages or settlement sought. If they believe a case has sufficient chances of success they will make an offer to fund part or the full funding requirements in exchange for an interest rate return or a hybrid funding model or interest and a percentage of damages. The types of funding offered will be depending on the case, the commercials and the probability of recoverability.

Information is Key!

Funders need as much information on a case as possible in order for them to adequately review a case and provide an assessment of it’s chances of success. Firstly they need the basics of the case, such as the type of claim, jurisdiction, quantum, supporting evidence, costs, timelines, risks, returns etc. This is required for the initial analysis. They will need to know any aspects of the case from a summary perspective to give them a background on the case and the parties involved.

Funders want to make sure that there is a strong attorney and legal team attached to a case and they have  a proven track record of success with similar cases and are committed to the case in question. They will want to know that the legal team have the ability to provide the time, resources and expertise to successfully litigate the case in question. Funding is available whether claims are being run on a fee paying or contingency  fee agreement basis so the objective is to have a solid infrastructure which will allow for a viable and successful lawsuit. This means a reputable legal team and claimant(s) who all share the same goals and objectives.

Funders will assess each in detail and will consider any potential outside elements which may have a negative effect on the case such as political unrest or jurisdictional issues. Funders needs to understand all aspects of the litigation whether it is standard personal injury claim or an investor-state arbitration matter. They need to understand the potential settlement or damages and they will use as much information as possible to analyse your case. Depending on the type on the case and it’s complexity they can seek expert legal advice, taking into account the economics of each individual case.

Does it Make Commercial Sense? 

Once the structure and specifics of the case are understood third party funders need to understand the commercials. They will first ensure the claim meets their minimum potential damages requirements. They will then assess how much funding is being requested, for what purpose, how long the claim is likely to last and how likely it is to be successful. Once they have acquired all information they will make a decision on the case. They can offer finance to cover part or all of the funding requirements and it can be on an interest only basis or on a hybrid funding model which includes interest and a percentage of damages. Each commercial litigation funding deal can vary from funder to funder depending on their specific requirements and commercial objectives

At Claims Funding we provide broker services by working with various Commercial Litigation Funding Companies and can assist you in obtaining terms on viable litigation requirements. We promote non recourse funding solutions that can be used to cover a wide range of commercial claims including but not limited to:

  • Copyright Claims
  • Breach of Contract
  • Financial Claims
  • Patent Infringement
  • Product Liability
  • Medical Negligence
  • Dental Claims
  • Investor Fraud
  • Construction Claims
  • IP Infringement
  • Financial Mis-Selling
  • Class Actions
  • Bespoke Claims Solutions

We work directly with individuals, businesses and solicitors and can arrange funding from $1,000 – $1m+ with no monthly repayments. You only ever repay the funding if your claim wins and your recover compensation. We ensure our clients have the funding and we can also provide ATE Insurance solutions designed to protect claimants against adverse costs in the event of unsuccessful litigation.

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