Why use legal funding?

Risk management tool

The ability to limit a claimant’s downside risk as the financial risk is transferred from the claimant to the funder.

Cashflow assistance

For many claimants, particularly corporates, the significant legal spend to pursue a claim can cause a drain on finances as well as presenting an opportunity cost, as vital cash resources are diverted away from revenue generating activities.

Positive accounting recognition

Legal dispute is notoriously expensive and those costs are recognised as an expense on a company’s profit and loss account, thereby reducing its operating profits for as many years as the legal dispute continues. By using funding, legal costs can be taken ‘off balance’ sheet, thereby ensuring that a company’s operating profit is not unnecessarily reduced and the company accounts will show a more accurate position of the company value.

An additional layer of diligence and oversight

Funders only invest in cases that they consider are likely to succeed. Most funders will also have significant in-house legal and financial expertise. Those skills can be useful to a potential claimant as they will have an interested, but dispassionate party who will stress-test the strength of your case and provide useful input over the life of a case.