Benefits of Litigation Financing for Debt Recovery in India

By John Freund |

When looking to demonstrate the benefits of using litigation financing, it can often be easy to simply highlight its utility and effectiveness in isolation. However, for those unsure of whether to adopt a relatively new tool, it can be even more powerful to demonstrate the ways in which third-party funding is more useful than the alternatives when tackling a specific problem, such as debt recovery.

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An LFJ Conversation with Michael Kelley, Partner, Parker Poe

By John Freund |

When looking to demonstrate the benefits of using litigation financing, it can often be easy to simply highlight its utility and effectiveness in isolation. However, for those unsure of whether to adopt a relatively new tool, it can be even more powerful to demonstrate the ways in which third-party funding is more useful than the alternatives when tackling a specific problem, such as debt recovery.

In a guest article for Financial Express, Kundan Shahi, CEO of LegalPay, provides a comparative analysis of the effectiveness of litigation financing versus debt recovery agents (DRAs) within India. 

Shahi highlights that the use of DRAs has been considered the standard approach for Indian financial institutions looking to recover bad loans. However, he also notes that DRAs have come under criticism for their low success rates, with only 2 in 10 cases reaching a positive resolution, as well as the ‘aggressive and intrusive’ methods used by DRAs that have bordered on illegality.

Shahi acknowledges that although adoption of litigation financing in India has been slower than in other territories, it is beginning to gain momentum and can offer a real alternative for companies pursuing debt recovery. He argues that litigation funding avoids any of the aggressive tactics used by DRAs, ensuring ‘ethical and legal compliance’, whilst also acting as a way for institutions to reduce the financial risk of debt recovery. Furthermore, given the nature of litigation funders’ work where recovery of assets is paramount, there is an increased probability of higher recovery rates compared to DRAs.

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Legal Finance SE Announces Plans to Fund Hundreds of Lawsuits Against Illegal Online Casinos

By Harry Moran |

When looking to demonstrate the benefits of using litigation financing, it can often be easy to simply highlight its utility and effectiveness in isolation. However, for those unsure of whether to adopt a relatively new tool, it can be even more powerful to demonstrate the ways in which third-party funding is more useful than the alternatives when tackling a specific problem, such as debt recovery.

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Federal Judges Argue Against Public Disclosure of Litigation Funding

By Harry Moran |

When looking to demonstrate the benefits of using litigation financing, it can often be easy to simply highlight its utility and effectiveness in isolation. However, for those unsure of whether to adopt a relatively new tool, it can be even more powerful to demonstrate the ways in which third-party funding is more useful than the alternatives when tackling a specific problem, such as debt recovery.

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