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Litigation funding and the effects on corporate finance

Litigation funding opens up new ways for companies and investors to discover and unlock hidden assets. In the past litigation has long been seen as a pit for resources with no winner. However, litigation funding turns these pitfalls into opportunities by assessing cases, sourcing funding, and paying out dividends in the event of a successful case. This new opportunity is facilitated by litigation funding firms such as ourselves. We connect litigants to funders, carry out due diligence and ultimately help litigants and investors successfully resolve disputes.

At Therium, we have developed our litigation models to provide specialised litigation finance designed to assist in cases around the world. We work across all sectors and have to date raised over $1.1bn in litigation funds. Here’s what you need to know about litigation funding and its effects on corporate finance.

 

What is Corporate Finance Litigation Funding?

To understand the boon of litigation funding we need to understand what the process is.

Simply put, litigation funding is a form of third-party financing for legal expenses. In exchange for covering the litigation costs of the case, investors receive a share of the proceeds from the resolution of the dispute.

This form of funding is attractive to litigants and investors as it creates a symbiotic relationship. Litigants get the funding they need to pursue their case while investors get a reward for taking the risk of investment.

 

Litigation, cost or asset?

Where litigation was once considered a hindrance it has become a whole new area for development. Not only does it empower litigants to pursue a settlement but it also opens up a new branch of investment. These positives have had an incredible effect on corporate finance with the creation of creative retainers and contracts. Litigation funding has only been legal in the UK since 2013 and this relatively new rich vein of funding is one that is yet to be tapped.

There are two main concerns for investors when looking into litigation funding; time scales and risk. While each case is unique it is worth noting that the majority of cases don’t go to trial and are usually settled in arbitration. For cases that do to go trial, there is a greater risk and usually a greater reward too.

We also specialise in de-risking and monetising claims, judgements and awards. As pioneers in the use of insurance to manage commercial dispute risk, we have developed a variety of ways to;

  • De-risk litigation
  • Remove the drain on cash flow and profit from financing litigation
  • Realise the value of a claim, judgement or award

For litigants such as small businesses, litigation funding gives them access to more independence and recourse. Where once litigants would not pursue a case because they didn’t have the liquid to fund a case and run a business, they can now use litigation funding to pursue their litigation and continue business as normal. Another benefit for litigants is that the return on investment is contingent on a case being successful.

 

Therium Litigation Funding

We are active in 5 continents and have to date funded claims valued at $36bn. We provide litigation finance in all forms, arbitration funding and single case litigation, funding law firms, portfolios of litigation and arbitration claims. Our experience and expertise are respected in our field and we are proud to be a founding member of the Association of Litigation Funders of England and Wales.

Contact us now to find out more about our litigation funding process or sign up to The Brief to stay up to date with the latest in litigation finance.

 

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