Litigation funding is one of the processes that is getting really popular among the people in the present time. Those who are involved in legal cases can take help of this funding process in order get the financial help to carry forward their case. The funders provide the funds to the party in need and if they win the case, they need to payback the amount with the added interest. If lost, you are not liable to pay any amount.
The need for embracing litigation funding
- The Litigation funding is ‘non recourse’, the funder will lose if the case they fund is unsuccessful and if it is success then funder can claim. The funders can take independent decision whether to fund or not and this will make claimant to reconsider about their claim because the funder reviewed the merit and demerit of the case.
- The use of Litigation funding can be highly advantageous from the perspective of corporate accounting. Once the litigation funding has been approved, the cost and contingent liabilities of pursuing a claim are effectively transferred to third party funder.
Types of Litigation Funding
- Commercial litigation: This funding is becoming popular as it allows the attorneys as well as small businesses to stay in which would have been otherwise difficult. It involves both the defendant and the plaintiff. The larger business firms have also started using this financial tool.
- Consumer litigation – It allows the individuals to continue with their case as they get the needed help in the form of funds from the companies. This help if not available would have proved very costly for the plaintiff.
Helpfully, in the light of growing international acceptance of the concept, several law firms, claimants, businesses can benefit from this funding system.