Until recently, large corporate defendants were often able to outspend their opponents, and to make the pursuit of justice difficult, risky, or even impossible. This imbalance of resources and risk has too often meant that justice was not pursued, even when a business had an excellent claim. Clients with meritorious claims are increasingly turning to litigation finance as a way to level the playing field, which can make the difference between justice delivered and justice denied.
Litigation finance is often referred to as “litigation funding” or “third party funding.” It is an arrangement between a funder and a client whereby the funder bears much of the cost and risk in pursuing a just claim, in exchange for a percentage of the damages recovered or a multiple of the costs funded – assuming the case is won. If the proceedings fail, the funder usually receives nothing.
In addition to assisting clients who are seeking funding for their cases, we also counsel funders on due diligence reviews, as well as advising on the legal, ethical, and regulatory implications of their work. As a result, we know the global litigation finance landscape exceptionally well and contribute regularly to discussions concerning the development of international third-party litigation finance.
Our experience and relationships in the area of litigation finance allows us to help claimants determine suitability for funding, and to prepare claims for presentation to the funding market; to advise clients regarding the legal, ethical, and regulatory implications related to funding;
to analyze litigation finance agreements; and to monitor funded cases to ensure effectiveness of representation.
Alternative Fee Arrangements
Liston Abramson appreciates that high-stakes litigation and arbitration drain cash flow and can impede the successful pursuit of a meritorious claim.
For that reason, we often partner with our clients to develop risk-sharing solutions and alternative fee arrangements. Alternative fee arrangements can provide better fee predictability and value in appropriate matters by focusing on results and efficiency — often without being based directly on the time expended.
In assessing whether to take on a case on a full or partial contingency basis, we look to the same key factors that determine whether a case is right for litigation funding:
- First, we look for cases with strong merits and substantial damages to recover on behalf of our client.
- Second, it is vital that the defendant has the financial strength to meet the claim.
- Third, we need to see a credible strategy and clear path with regard to where and how a judgement or award against the defendant will be enforced.