As lawyers, courts, and plaintiffs develop an appreciation for Litigation Finance, competition becomes increasingly robust. Demand for funding is up, as are the number of new funders throwing their hats into the ring. There’s a wide array of funding entities now, and they vary in terms of preferred case size, minimum and maximum deployments, jurisdiction, commercial or industry specialties, and more.
QUINN EMANUEL AND LONGFORD CAPITAL TO OFFER LITIGATION FUNDING TO PRIVATE EQUITY CLIENTS
As lawyers, courts, and plaintiffs develop an appreciation for Litigation Finance, competition becomes increasingly robust. Demand for funding is up, as are the number of new funders throwing their hats into the ring. There’s a wide array of funding entities now, and they vary in terms of preferred case size, minimum and maximum deployments, jurisdiction, commercial or industry specialties, and more.
Above the Law details how claim holders can best go about choosing the right litigation funder to meet their needs. One might think that rankings would give the clearest picture of the available funder options—but does it?
Cost is considered the most important factor in choosing a funder, according to respondents in this year’s annual survey of lawyers. That’s not surprising, but it’s worth noting that cost probably shouldn’t be a deciding factor—at least not without further consideration.
Preferred investment size and type are both important. Most funders have a preferred investment size that is based on timing, award potential, the likelihood of settlement, and more. Knowing how your case coincides (or doesn’t) with what funders are looking for can help you approach the likeliest match. The same goes for preferred investment types. Some funders only take commercial cases, or class actions, or patent and IP cases. Finding a funder that specializes in your case type brings additional expertise and experience to your team—which has benefits that can far outweigh a monetary percentage.
Capital reserves and the right to end a funding agreement are also critical considerations. A funder should be well capitalized at the outset and should remain so for the life of the case. Also, carefully consider the terms under which a funder can exit and cease funding your litigation. Is the funder committed to seeing the case through to completion?
Statistics can tell you about funders, but they can’t really discern the right funder for your specific situation. That’s why all factors deserve consideration before a choice is made.
