In its simplest form, litigation finance occurs when a litigation funder agrees to pay the costs of pursuing a legal claim in return for a share of any recovery obtained through settlement or adjudication.
A funder may also agree to pay other costs associated with the claim, including putting up security for costs or taking out “After-The-Event” (ATE) insurance to cover an opponent’s legal costs if the case loses.
Under most litigation finance arrangements, funds are advanced by litigation funding firms on a non-recourse basis. If there is no recovery of proceeds through settlement or adjudication, the claimant owes the funder nothing.
Litigation funding (or “litigation finance”) restores balance to commercial disputes, allowing litigants to obtain results that properly reflect the merits of the case rather than being forced to compromise on sub-optimal terms by a better-resourced opponent.
Litigation funding in the UK promotes access to justice and is supported by the UK judiciary. Litigation funding in Australia, the USA and other common and civil law jurisdictions is also a well-established tool. Litigation finance is a crucial force in driving societal, environmental and governance improvements through the legal process.
Litigation finance occurs when a litigation funder agrees to pay the costs of pursuing a legal claim in return for a share of any recovery obtained through settlement or adjudication. To claimants, it's a way of eliminating (or sharing) financial risk of litigation and obtaining access to justice. To investors, it's an alternative asset class.
Businesses large and small, and individuals, either as single claimants, or together in class actions; insolvency practitioners and law firms.
Litigation finance is more straight forward to arrange on the claimant-side than the defence-side, although defendant-side litigation funding is possible in the right circumstances.
All cases that we finance have to meet our criteria.
More than that, they have to have strong access to justice themes: we make sure that we are on the "right" side.
Our focus is on commercial litigation and class actions. We avoid family disputes such as divorce, personal injury cases, employment cases, and investment treaty arbitrations.
Balance can fund adverse costs insurance premiums as part of its capital commitment to the case. Balance can either be the insured entity and provide a back-to-back indemnity for adverse costs to the claimant, or the claimant can be the insured under the policy.