Litigation funding is also commonly referred to as legal financing along with several other names such as professional funding, third-party funding, settlement funding, etc. This helps a person/small business/law firm to bear the costs of the legal proceedings. The litigant gets complete or a part of the finances for the legal costs incurred. This financial help is given by a third-party who has no relation to the case that the litigant is fighting. When the case is declared in favor of the litigant the litigation funding company gets a share from the proceeds of the claim that the litigant receives. If the litigant loses the case, then the financer loses what has been an investment, and the litigant doesn’t owe anything to the litigation funding company.
The share that the funder will get from the proceeds if the case is won is decided in the beginning before the financer, and the litigant can get into an agreement. The amount usually includes a specific percentage of the damages covered or a certain amount of the money that the financer has given to the litigant or any other agreement that the two parties have come to.
Litigation funding is a great source of help to those who are unable to get their justified claim because they are devoid of proper financial back-up. Limited finances stop them from fighting for their case, and thus they end up taking whatever little settlement the defendant offers to them.
There are usually two types of litigation funding:
- Commercial financing which is meant for companies to fight legal claims
- Consumer financing which is given to individuals who are fighting a claim settlement case for personal injury
Litigation funding is no more an alien term and has become quite popular in the society. If you are also awaiting a claim settlement, then take help from a litigation funding company to continue fighting your legal battle and get a proper settlement.