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Litigation finance

What is litigation finance?

Litigation finance covers any transaction where the value of a legal claim, judgment or award is used to obtain financing. There are many specialized financial institutions across the world who now offer this type of financing.

Litigation finance allows individuals, companies and other institutions to unlock the often-substantial value buried in unresolved litigation claims. Historically these disputes have been some of the largest assets on corporate balance sheets. Now they offer new financing options to any CFO.

The following forms of litigation finance are available today:

  1. Litigation funding

    Financing claim prosecution, whereby a provider of finance covers the expenses of bringing a legal proceeding in exchange for a return tied to the outcome of the case. The return can be defined as a proportion of damages or a multiple of the invested amount or a combination of the two.

  2. Financing enforcement

    Financing the enforcement of a judgment or award, whereby a provider of finance and often expertise in this area covers the expenses of recovering an amount awarded in exchange for a return tied to the outcome of the case. The return can again be defined as a proportion of damages or a multiple of the invested amount or a combination of the two.

  3. Financing business expenses

    Litigation finance can be used to fund activities other than prosecuting the underlying claim. High value claims can e.g. facilitate the financing of business operations.

  4. Portfolio financing

    Portfolios of cases can be funded using litigation finance. This can be done for law firms as well as clients and distributes risk across multiple cases and thus allows the funder to offer better commercial terms.

  5. Upfront monetisation

    Litigation finance can provide an immediate, discounted payment on an uncollected judgment or award or on legal fees.

“At a difficult time, when Venezuela had expropriated our assets, ClaimTrading quickly found an excellent financing partner for us and made the whole process manageable.“ Andre Agapov, CEO, Rusoro Mining Ltd

“ClaimTrading has been an effective and responsive partner in our client's search for the most favorable funding product. It’s a virtual one-stop shop with top caliber service.“ Partner International Arbitration Practice Group, Arnold & Porter LLP

“ClaimTrading stands out as a broker which intelligently reviews the cases it sources, thinking about them both from the claimant and the funder’s point of view – that is a rare skill, delivered with excellent customer service.“ Susan Dunn, Co-Founder Harbour Litigation Funding

“We look forward to continuing our work with ClaimTrading, which will help to establish funding as part of the fabric of the legal market.“ Chris Bogart, CEO Burford Capital in GAR

“Claimants using the platform will find a range of funders with different approaches and underwriting criteria - it's very exciting.“ Richard Fields, CEO Juridica Capital Management in GAR

“We are very impressed with the service provided by ClaimTrading.“ Andre Agapov, CEO, Rusoro Mining Ltd

“We're thrilled by the innovation shown by Maddi and John and by a business model that is sensitive to the needs of those who have capital ready to deploy and inhouse resources to quickly judge a potential claim.“ Chris Bogart, CEO Burford Capital in GAR

“ClaimTrading’s input was invaluable in our arbitration. In delicate circumstances, it demonstrated responsiveness, creativity and dedication in finding funding solutions for our client.“ Partner International Arbitration, Dentons

“For those seeking investment it should provide access to a wider range of potential investors in a controlled manner, while, for investors, it represents a source of deal flow that has already passed an initial credibility filter.” Mark Wells, Co-Founder Calunius Capital LLP in GAR

“Through ClaimTrading’s depth of knowledge of the market and multidisciplinary expertise, they are able to identify and introduce us to the appropriate investors for the specifics of our matter. And Maddi Azpiroz is outstanding.“ Partner International Arbitration Practice Group, Arnold & Porter LLP

“ClaimTrading played a key role in making this deal happen in a mutually beneficial way for all stakeholders.“ Mick Smith, Co-Founder Calunius Capital LLP