Litigation funding is the financing of legal funding cases by third party in return for a defined share of the proceeds.Third party litigation funding Litigation funding Litigation financing.
Litigation funding, also known as third-party litigation funding or litigation financing, is a practice where a third-party company provides financial support to a plaintiff or law firm to pursue a legal case in exchange for a portion of any settlement or award. The third-party company, known as a litigation funder, assumes the financial risk of the lawsuit in exchange for a percentage of the potential damages.
The purpose of litigation funding is to provide plaintiffs and law firms with access to justice and the financial resources needed to pursue legal claims. This is particularly important in cases where the cost of litigation is high, such as in complex commercial litigation or class actions. Litigation funding can also provide plaintiffs with the means to pay for living expenses and other costs during the litigation process.
Critics of litigation funding argue that it can encourage frivolous lawsuits and may lead to conflicts of interest. However, proponents of litigation funding argue that it levels the playing field between plaintiffs and defendants, particularly in cases where the defendant is a large corporation with deep pockets.
Overall, litigation funding has become an increasingly popular tool in the legal industry, and its use is expected to continue to grow as more plaintiffs and law firms seek financial support to pursue legal claims.
