Creditor’s Guide to Litigation Funding

Essentially, Litigation Funders want to know they have a good chance of succeeding. Subsequently, before considering whether to fund a case; they will seek and retain the services of an experienced lawyer. Their lawyer will critique the evidence, and may request additional witness statements or a live conference with the chief litigant in order to produce an 'opinion with prospects'.

In most cases, for a Litigation Funder to proceed with a claim, council's opinion must forecast at least a 55% chance of success. After Litigation Funders have agreed to pursue the claim, they'll hedge their bets by purchasing After the Event (ATE) insurance. This is an expensive premium that provides cover for payment of the defendant's legal costs, as may be ordered by the court.

Litigation Funding is a valuable service because it empowers and enables claimants who would otherwise be disenfranchised to seek legal remedy and get justice, especially in Professional Negligence Claims.

Industry experts know that:

• Most claims never reach a full trial
• The majority of claims are settled in mediation
• Trials can be expensive and result in an unfavourable outcome.

As a result, Litigation Funders, insurers, and their lawyers try to protect themselves as much as possible, and are more costs-focused and emotionally detached than the average claimant. Sometimes, the defendant's lawyers apply to the court seeking for the claimant to provide security of costs. This is evidence that if ordered to, the claimant has the resources to pay the defendant's legal expenses.

In most cases, if the arguments put forward by the defendant’s lawyer are persuasive, the court will rule in their favour and may order the claimant to introduce suitable security (cash, property or other assets) into the proceedings for the benefit of the defendant to meet the trial's costs in the event the claim or any part of it is unsuccessful.