The use of outside capital in the legal industry is becoming increasingly widespread in Germany. Companies and law firms alike are using litigation funding to conserve their capital and to invest in growth.
What is litigation funding?
Litigation funding (also called legal finance or litigation finance) is commonly used to remove the costs of pursuing commercial litigation or arbitration, such as legal fees and expenses. Increasingly, companies and law firms use legal finance to accelerate a portion of the expected entitlement of pending claims, judgments, awards or fees. In both cases, a third-party funder assumes downside risk of loss in exchange for a portion of the ultimate recovery. Financing does not impact control, which remains with the client, and it can be provided for a single commercial matter or for multiple matters.
Who uses litigation funding?
- GCs and heads of litigation seeking greater control over their litigation and arbitration budgets
- CFOs and other finance professionals who want to enhance liquidity without adding debt
How are European companies unlocking their legal assets to solve business problems?
- In-house lawyers who want to bring innovation to the legal department
- Litigation partners with fee-fatigued clients
- Arbitration lawyers (and their clients) who need to offset the costs of time-consuming disputes
- Asset managers and other large institutional investors that wish to take a systematic approach to pursuing legal recoveries against issuers accused of fraud
- Companies engaged in costly competition claims
Ready to learn more?
Our introduction to litigation funding includes videos, guides and a webinar detailing everything companies and law firms need to know about securing financing.