What Makes Litigation Funders Accept a Case?

Litigation funding in the UK has soared in popularity. It offers businesses and individuals the opportunity to take a case to court and achieve justice, without worrying about the financial costs. As a result, many companies are turning to litigation funding providers as a viable option, to help them with the costly funding that is required.

What is it?

Fundamentally third party funding, otherwise referred to as litigation funding, provides businesses with the money to take a case to court. A litigation funding company pays all the necessary court expenditures, which means that the business does not need to pay a single penny up front.

It is only when the case is won, that the funder would seek to recoup the loan. If the case is lost, the business still does not have to pay anything.

How much do litigation funders charge?

All third party funders have their own rates in question. Some ask for the investment back, plus a return on investment of around 30% of the damages that have been awarded. On average, they charge 25-45% of the damages, but in the long run this is extremely worthwhile, due to the fact that court cases can stretch out as long as five years.

So what kind of cases do they take on?

Litigation funding companies only invest in risk-free, viable cases. Up to 85% of applications are rejected on a daily basis, so if your case is taken on board, the firm obviously deems your case to be sound.

To take a case on, there is an extensive procedure which they must go through.

Cases must:

  • Be strong enough to win
  • The defendant must be able to pay for the case
  • Be of high value; some third party funders only accept cases with a value of more than £5million. Vannin Capital accepts cases with a minimum value of £1million.

So there you have it; there are various reasons why litigation funding companies accept cases. Funders must go through extensive due diligence before taking a case on. There is an increased risk with funding cases which are of higher value, but the potential returns can be worth it.

This article was written by Lauren Grice on behalf of Vannin Capital, the specialists in third party litigation funding. Their funding solutions eliminate the risk of litigation, and unlock the possibilities for claimants, lawyers and businesses.