Everything we know about the business world is changing, in no small part due to the Coronavirus. Retail outlets, restaurants, bars, theaters, and even insurance companies are feeling the crunch caused by stay-at-home orders, supply shortages, and staffing woes. Yet through it all, Litigation Finance is enjoying a surge of opportunity.
An LFJ Conversation with Jonathan Stroud
Everything we know about the business world is changing, in no small part due to the Coronavirus. Retail outlets, restaurants, bars, theaters, and even insurance companies are feeling the crunch caused by stay-at-home orders, supply shortages, and staffing woes. Yet through it all, Litigation Finance is enjoying a surge of opportunity.
Bloomberg Law reports that while the impact on the legal community will be long-lasting, there are steps firms can take to mitigate how much COVID-19 impinges on them. Right now, we’re seeing industries across the board become more risk-averse. IPOs are on hold, mergers and acquisitions are practically non-existent. At the same time, third-party litigation funding is more necessary than ever.
When clients or even firms are in financial peril, a contract with an experienced funder is an excellent way to mitigate risk and keep balance sheets tight. The concept that litigation funding increases access to the pursuit of justice is more evident than ever.
It’s expected that specific areas of law will be extra active post-COVID. Insurance coverage conflicts, breach of contract, and insolvency will all likely increase. Portfolio funding will probably grow as well, along with claims monetization.
As per usual, those with more capital on hand will likely do better in a post-COVID world. But given that litigation funding returns are not correlated with the rest of the market, smaller funding entities may see increased opportunities to expand as capital flows into this attractive asset class.
