With the economic climate uncertain and rising inflation taking a toll on markets around the world, industry insiders are keeping a careful eye on a related spike for insolvencies. As a result, insolvency practitioners are under pressure to finance their operations, and may need to turn to litigation funders in order to successfully recover assets.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
With the economic climate uncertain and rising inflation taking a toll on markets around the world, industry insiders are keeping a careful eye on a related spike for insolvencies. As a result, insolvency practitioners are under pressure to finance their operations, and may need to turn to litigation funders in order to successfully recover assets.
In an article for LondonlovesBusiness, Lucas Arnold, Director of Litigation Funding at Harbour, makes the case for practitioners to increasingly leverage third-party funding where legal claims need to be brought. Mr Arnold argues that whether it is through individual case funding or portfolio funding, litigation finance firms can reduce financial risk for insolvency practitioners, whilst allowing them to pursue legal redress against issues such as fraudulent directors or wrongful trading.
Mr Arnold highlights that with companies facing financial strain from the economic downturn and budgets being restricted or reduced across the board, litigation funding is a valuable tool in a Board’s arsenal. Beyond case and portfolio funding, he also puts forward the merits of a funding facility which will give insolvency practitioners a pool of capital to deploy in advance of any legal proceedings they may need to pursue, rather than being stuck in a reactive footing.
