Third party litigation funding provides a solution for those who have suffered substantial losses and do not have (or do not wish to risk) the capital to privately fund their claim.
A claim financed by third party litigation funding adds an extra party to the usual client-solicitor relationship: the private litigation funder. The litigation funder will cover the legal fees for all or part of the cost of the litigation, but does not have a direct interest in the proceedings and cannot instruct the solicitor directly. The client then enters into an arrangement with the litigation funder whereby the litigation funder pays the solicitor’s fees, and receives a pre-agreed percentage claim (often on a staggered basis) of the proceeds of the from the client after the conclusion of the litigation. If the claim is unsuccessful, the litigation funder loses their money and the client does not have to repay anything.
Third party litigation funding necessarily involves a level of risk for the litigation funder, and is currently only available for high value disputes. It will be the litigation funder, rather than the solicitor, who decides whether the merits of a particular claim are sufficient for them to be able to offer funding, and if so, whether they will be able to fund part or all of the claim.
Our Dispute Resolution Team