Most people never get into significant legal issues. But not everyone is so fortunate, and it is typical for those with potential legal battles to hire attorneys to get the justice they deserve. But even though one has a great case, there is always a chance that a plaintiff or an attorney may lack the funds to cover all necessary expenses during the pendency of a claim. While claimants and attorneys can get the needed capital from a litigation funding company, there will always be a less clear answer to this type of financing.
If you want to know what questions to ask before engaging with a litigation funder, these can help you feel more confident and help you navigate the legal finance process more efficiently.
Is litigation funding available just to private parties?
No. This is a false impression. While it’s true that the initial purpose of commercial litigation financing was to aid individual plaintiffs with commercial lawsuit claims in the pursuit of strong cases, its reach has grown over recent years.
The foundation for funding litigation proceedings also applies to a single case or a portfolio of cases.
When funding a single case, a litigation funder like Baker Street Funding provides money upfront to cover fees and expenses in exchange for a negotiated return depending on the case’s result. Clients with several litigation cases often include a defense case in a portfolio that consists of both plaintiff and defense actions. Baker Street Funding provides both portfolio and single-case funding.
The practice of litigation finance is also growing in popularity when it comes to business restructuring and bankruptcy. Funding is available to support the pursuit of defensible legal claims, such as avoidance proceedings or other disputes, by a debtor, a committee, or a trustee acting on behalf of a litigation or liquidation trust. It is also possible to get funding to support the debtor’s confirmation of a plan.
In any case, legal funding is no longer exclusively available to plaintiffs. We are developing novel applications and transaction structures available to law firms to anticipate more rapid market evolution.
What expenses are covered by litigation funding?
Litigation funding offers operating or working capital for companies by monetizing a part of a lawsuit claim. Anyone who obtains working capital can use the funds for any legitimate business purpose, including paying overhead costs, promoting a new product, entering new markets, or any other legit business use.
In addition, litigation funding provides funds to be used to pay for some or all of the legal expenses and costs in a dispute. And, even though it is termed “litigation finance,” litigation funding also covers any case-related expenses, such as expert reports, court expenses, and more.
This also applies to commercial litigation funding, which may be used with the same degree of flexibility.
Is litigation funding morally right?
Many legal organizations, including the American Bar Association, have researched litigation finance, and with one exception, it is widely regarded as ethical.
However, some common ethical issues with litigation funding revolve around protecting the privacy of sensitive case data. As long as a funder is willing to put in the effort to ensure a non-disclosure agreement, ethical problems may be safely handled through customized agreement structures.
Never be afraid to question your funder on how they intend to guarantee ethical compliance in your local jurisdiction. A funder needs to be able to respond to any ethical queries you have satisfactorily.
With Baker Street Funding, every connection we establish and every transaction we complete complies with all ethical norms in force in the relevant countries, thanks to our collaboration with the finest ethics experts in the sector.
Which kind of litigation funder would be ideal for me?
Because a financial relationship might endure for many years, it’s crucial to know who you are doing a deal with. Plaintiffs and law firms must be aware of the solutions that lenders may offer and the most important factors to be considered when selecting them as a partner to succeed in a field as young as legal funding.
At Baker Street Funding, we strive to provide our clients with innovation, quickness, competitive rates, and assurance. We have committed investment capital to finance lawsuits as soon as our funding agreement is signed.
Investing in legal claims is the foundation of our whole company, reducing waiting time and increasing predictability. In addition, we are delighted to work with plaintiffs and counsel to tailor optimal conditions for the current investment. Interest rates for litigation funding for attorneys start at 2%, simple per month.
We strongly believe that for the litigation funding sector to remain successful, it must also be a matter of justice in addition to money and profits.
The takeaway
Access to justice is a priority for Baker Street Funding. Our ability to work with the majority of top law firms is a result of the combination of our legal knowledge, financial competence, commercial and technical know-how, and sizeable financial resource. Because the funding capital is based on the potential proceedings of legal disputes, it effectively serves as security for our investments.
We speak with many businesses and legal firms about the workings of funding and the advantages it provides since we are one of New York’s and Florida’s leading litigation funders.
Looking to engage with a litigation funder? Request funding today.
