Litigation finance explained

A brief description of litigation finance

Litigation funding is at its heart a very simple concept. In exchange for a cut of any recovery from a lawsuit, a litigation funder pays for the legal costs and legal fees associated with getting that case to a successful outcome.

The practice of litigation finance is well established in the United Kingdom and is relatively new in the United States. There have been many new entrants into the space in the last couple of years, and so it is imperative that a potential applicant carefully review all of the terminology and agreements. Plaintiffs (with legal counsel) should ensure that they are well protected and understand the terms of whatever agreements they are signing.

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