COVID is Spurring Litigation Funding in India

As COVID continues to ravage businesses, insolvencies and breach of contract lawsuits have skyrocketed. In India, businesses are enduring a crash in sales and revenue. They also lack the mechanisms needed to effectively address the sharp rise in litigation.

Legal Desire explains that when a business wants to pursue a valid legal claim, but doesn’t want to invest resources—third-party funding can be beneficial. The pandemic is one of the reasons Litigation Finance is gaining in popularity in India, which has an enormous legal market. Investors outside the country are now looking at India as a new horizon within which their investments might come to fruition.

Until recently, India was focused on whether or not existing laws covering champerty and similar concepts forbade the practice. Over the last few years, litigation funding has been determined by top legal minds to be permissible. Now, the legal world will examine how the practice will be regulated.

Some legal firms in India have already embraced third-party legal funding thanks to their international clients. Funders like Vannin Capital and Augusta have already funded cases in Indian courts.

The founding of the Indian Association for Litigation Finance is another big step forward for the industry. Like similar groups around the world, including the ILFA, the organization is poised to increase confidence in the industry and to self-regulate, while working to educate clients and firms about the practice.

Due to the havoc caused by COVID, litigation funding has become a highly attractive concept for investors, because it’s not correlated with the rest of the market. Global investors seem ready to put their money in India, as they have in the past with funders in the US, UK, and Australia, among others. This promises increased opportunities within the industry, as well as a sharp rise in access to justice for those who need it most.