Litigation can be an expensive and risky process. The demand for alternative funding is therefore ever increasing. It is however important that you choose the right option before embarking on the process. Our litigation experts outline 8 top tips to get the best deal when looking to obtain litigation funding:
Take some advice
This seems simple and obvious, but a small investment at the start can save time and money in the long run. The various litigation funders in the market vary in size, aptitude to risk and expense. We have experience in dealing with an array of litigation funders and are able to adequately ‘package’ your dispute to the appropriate funders so you have the best opportunity to obtain funding.
Know what you want
Be prepared before submitting your application. Funders like to see a detailed breakdown of the future fees. An application with a total costs figure as “£TBC” will not be successful. Likewise just a simple “£75,000” will also be rejected. Funders need to see the potential litigation costs broken down into each individual area, from pre-litigation to negotiations. Therefore, be prepared in knowing exactly how much you require for each stage of the litigation.
The market for litigation funding is ever increasing. Funders are also now looking to specialise in certain types of disputes in various sectors in the market. Remember you are the customer, just because you have had one application successful it doesn’t mean that there is not a better option out there more suited to your needs.
Litigation may be a time pressured exercise, litigation funding can add to those pressures. Be sure to respond, advise, answer and deal with all enquires from the funders in a timely and helpful manner. Yes you are the customer, but they are also providing you with a service / investment into your company that will help you - treat them as if they were a long established valued customer.
Take advice from a lawyer and set up your case properly. Consider in advance how much your claim is worth. These calculations may involve the use of experts / accountants however your funder will want to see the potential recovery before they provide funding. The funders are making an investment, they therefore want to see a likely return. A report from an expert / your accountant on the loss / value of the claim will only strengthen your application.
Ask for feedback
If you application is unsuccessful, ask why. Just because one funder rejects your proposal it does not mean that another will not. Any feedback provided can only strengthen any future applications you wish to make. Even if your application is successful we would recommend you ask for feedback - it is always useful to have a fresh set of eyes looking at the strengths and weaknesses of your case before embarking on any litigation.
See the bigger picture
The phrase “see you in court” may come back to haunt you. Many funding agreements have settlement clauses written into them. Therefore be open to offers being put forward. Just because the defendant is not willing to pay the full amount it does not mean you should not settle. Treat the litigation funding as if it was your company’s own cash. Be mindful of costs incurred and future costs to take the case to trial and look at the cost benefit. Spending a further £10,000 in legal fees to recover a further £5,000 in damages makes no sense.
The better the prospects of success the case enjoys the better chance of good funding offers. Be creative in coming up with ways to increase your cases prospects of success, look at what you are at risk and try to deal with those problems head-on. Highlight these issues to the funder and detail how you are to address them. These steps will likely result in increased funding offers at the best rates.
If you are unsuccessful do not think that is the end of it. If you follow our above tips then you are usually in a better position to resubmit your applications. Learn from the points / queries the funders have asked, address the areas of issue and resubmit your applications. Experience tells us that these re-applications can be accepted.
If you need any further information on the issues in this guide please contact Alistair Gregory, a Partner and specialist in litigation, on 0175 321 6399.