Funded disputes, also known as third party funding or litigation funding, have evolved considerably over the last decade. Third party funding is now an established feature of the commercial disputes landscape and, potentially, an important tool to allow good claims to be brought to court.
What is a funded dispute?
- A funded dispute is when a third party funder agrees to pay some or all of the legal costs associated with a claim.
- Typically, the funding will cover the funded party’s legal fees and expenses incurred in the claim.
- The funder usually obtains insurance or a bank guarantee to pay the other side’s costs if the funded party loses, and to provide security for the opponent’s costs.
- If the case is successful, the funder receives a share of the proceeds, based on the agreement between the funder and the claimant.
Who is third party funding for?
Not every potential claimant can afford legal proceedings; it was the impecunious who were the first users of litigation funding. In principle, third party funding allows anyone, not just those who can afford it, to pursue legal action where it is warranted.
Recently, however, the funded disputes market has evolved considerably. It is now commonly used by wealthy parties, because of the specific benefits it affords.
For a company involved in litigation or arbitration, third party funding offers opportunities to manage risk and monetise assets. Techniques include portfolio funding, pre-judgment monetisation of claims and ATE insurance for own-side costs.
In short, the range of disputes in which, and the parties for whom, third party funding is available has grown exponentially.
How we can help?
Shepherd and Wedderburn’s involvement with third party funding reaches back to its very inception. Our early and continued position at the forefront of the funded disputes market is what sets us apart from other law firms in the marketplace. Notably:
- we represented the first party ever to make use of third party funding in a claim before the Competition Appeals Tribunal; and
- we were the first UK100 law firm to offer a multi-million-pound litigation finance portfolio under an arrangement with Burford Capital, a leading global finance firm focused on the law.
Our experience and knowledge of funded disputes, in all their forms, and our close relationship with members of the Association of Litigation Funders, means that we are in an unrivalled position to address your funding needs.
If you would like to learn more about how we can support you and your specific requirements, please get in touch with one of the funded disputes team.