Third party funders help to reduce the risk of litigation for corporates Visit us today and apply for Legal Funding at http://www.woodsfordlitigationfunding.com/

1. Third party funders help to reduce the risk of litigation for corporates
What is Litigation Funding?
Litigation funding is the financing by one party of litigation
brought by another in return for a percentage of any benefits
received by the litigant.
Visit us today and apply for funding at http://www.woodsfordlitigationfunding.com/

2. The Problem
The problem with litigation is that it is a very risky business and can
seriously damage a company's balance sheet. Some companies consider
management of litigation to be a core competence and they dedicate
significant resources to this activity. The tobacco, pharmaceutical, energy,
banking and insurance sectors are well publicised examples of litigious
industries, and companies in these sectors often have large in-house legal
teams and significant budgets dedicated to the pursuit (and defence) of
litigation.
Visit us today and apply for funding at http://www.woodsfordlitigationfunding.com/

3. The Problem
However, for directors of companies operating in a less litigious
environment, and where significant actions are infrequent, the prospect of
pursuing litigation, either as a claimant or a defendant, can be daunting;
particularly given that management may lack the experience of managing
such actions. Litigation can be a real pain for the Finance Director who is
expected to manage the financing of what is an inherently uncertain and
difficult to control expense. The English legal system is world renowned for
the impartiality of its justice, but it has become one of the most expensive
jurisdictions in which to resolve a dispute.
Visit us today and apply for funding at http://www.woodsfordlitigationfunding.com/

4. The Solution
Prior to the case of Arkin v Borchard Lines Ltd & Others in 2005, there was
considerable uncertainty over the effect of the medieval laws of
‘champerty’ and ‘maintenance’, or in common parlance “buying into
someone else’s lawsuit”. However in this landmark case the Court of
Appeal made it clear that third party financing is a legitimate method of
pursuing litigation and thus opened up the litigation funding market in the
UK.
In practice, litigation funding is not the ‘silver bullet’ to all litigation issues
faced by companies. For example, it is usually only financially viable to
fund commercial litigation where a claim is for a substantial amount and is
more commonly available to a claimant rather than a defendant; however,
there are funders who will finance lower value claims and also funders who
will finance defendants. There are, however, significant advantages both
from a commercial and accounting point of view to a party that can secure
funding.
Visit us today and apply for funding at http://www.woodsfordlitigationfunding.com/

5. What are the Advantages of Third Party Funding Litigation?
First, and perhaps most importantly, it is possible for the funded party to
lay off the financial risk of pursuing a claim, in return for giving up some of
the upside. As a result of funding, the risk profile of pursuing litigation
changes significantly and the short to medium-term cash flow position will
be improved. Once the funder has reviewed the merits of the case and
agreed to proceed, it will provide funding for some or all the plaintiff’s legal
costs and also for the defendant’s costs, where the action is unsuccessful.
Some funders may also require that the claimant enters into a partial
conditional fee agreement with their lawyers to secure a reduction in their
fees, which the lawyers only recoup if the claimant is successful, together
will a success fee. This has the effect of aligning the financial interests of
all the parties – claimant, lawyers and the funder.
Visit us today and apply for funding at http://www.woodsfordlitigationfunding.com/

6. What are the Advantages of Third Party Funding Litigation?
Second, some funders, particularly those who employ experienced
litigators, are able to offer a well informed view as to the merits of the case,
effectively providing a free second pair of eyes, and guidance as to which
lawyers are best suited to handle the case. This can be particularly useful
for companies with limited experience of litigation.
Visit us today and apply for funding at http://www.woodsfordlitigationfunding.com/

7. What are the Advantages of Third Party Funding Litigation?
Third, litigation funded by a third party will have a neutral impact on the
financial statements of the company, whereas self-funded litigation can have
a negative impact on both the P&L, cash flow and disclosures. The
following example illustrates this point. For simplicity the issue of
recoverability of costs in the event of success has been ignored because it is
very rare for all legal costs incurred to be recovered from the other side if the
case is won (just as, in the event of a loss, it is rare to pay 100% of the
opposition’s costs).
Visit us today and apply for Legal Funding at http://www.woodsfordlitigationfunding.com/