Litigation funding

Litigation funding continues to grow in popularity, driven by a growth of class actions and high-profile decisions.

Whilst growing in popularity, it is an area which, in legal terms, is still evolving; there is no uniform approach to a litigation funding transaction, meaning all stakeholders need to be alive to the issues and risks at play throughout the lifecycle of a funded claim.

What is litigation funding?

Litigation funding is a practice whereby third-party funders provide finance to law firms, and claimants, to fund legal costs. It is an area of growing interest to private capital investors, with its potential for strong returns, and its typically non-recourse model can open up routes to justice otherwise unaffordable for many claimants. But its limited regulatory oversight compels stakeholders to seek adequate independent legal advice to ensure their interests are being best protected.

How can we help?

Financing

Our experienced litigation finance team has considerable expertise in advising on the financing structures and documentation required to implement a litigation funding transaction. From debt funds, to family offices, to private equity, our team have advised many funders, as well as law firms and claimants, within this space on the necessary, and bespoke, funding structures required to best mitigate the risks and capitalise on the opportunities involved.

Litigation

We offer a cross-practice litigation funding solution enabling clients to pursue claims with minimal financial exposure. Through conditional fee agreements or damages-based agreements, we act either partially or fully at risk - we only charge if the case succeeds. This flexibility allows clients to unlock claims that might otherwise be stalled due to funding constraints. Our knowledge and expertise in pursuing funded claims ourselves, leaves us well placed to support funders and other stakeholders who have funded claims being pursued by other law firms. Whether it is providing strategic support or claim oversight, we are adept at providing whatever advice is required to achieve a positive outcome for all stakeholders.

Regulation

Litigation funding carries considerable risk, particularly in an environment with limited regulatory oversight. Whilst not yet subject to FCA oversight in the UK, funders must still navigate rules surrounding anti-money laundering, consumer protection and fair dealing amongst others. Our team can help you navigate those risks, whilst preserving the commercial viability of funding arrangements.

Tax

The tax treatment of litigation funding arrangements is often overlooked. Tax treatment will be nuanced, depending on a funder’s, and law firm’s, business model, and relevant jurisdictions. Our team can support you to structure your funding model to optimise tax efficiencies.

We have outlined above some of the key areas we feel we can provide you with most value, but as a full-service law firm for clients across their personal and business needs, there are many other areas we can add value. Please don’t hesitate to get in touch if you need any support.