Litigation funding: a useful tool for forward-looking GCs and in-house lawyers
Crafty Counsel Disputes Day in November 2022 brought together in-house GCs and legal teams in London to discuss how to successfully manage litigation and other disputes. Panellist and Therium Investment Manager Chris Wilkins shared his insights into how litigation funding can be a game changing finance tool for corporates.
The best general counsel and in-house lawyers are always focused on how they can add value to their businesses. Litigation funding provides an opportunity to do just that.
Litigation funding takes many forms, but typically a litigation funder will cover the costs and expenses of running a claim in exchange for a share of the proceeds if the claim is successful. Aggrieved parties without the means to self-fund their claims are obvious users of litigation funding, but even well-capitalised corporates are increasingly looking to use litigation funding as a means to manage the costs and risks of their disputes or bring cash onto their balance sheets by monetising claims or awards. These solutions can result in substantial freed-up capital for more productive uses across the business, such as to fund growth.
As awareness and understanding of litigation funding grows, in-house lawyers are becoming much less concerned about what it means for control of their litigation strategy. In England, by law, funders cannot exercise undue control over the claim. Many funders are litigators by background, who can provide additional expertise to the case team, but they remain passive providers of capital. In addition, the presence of third-party funding can also provide a tactical advantage by demonstrating the seriousness of a claim to the other side and to shareholders and the market.
After many years of evolution, litigation funding is now accepted as a key part of the litigation landscape and disputes process. As the industry continues to grow and develop, the ways in which corporate clients can access capital to fund meritorious claims have also increased, giving general counsel and in-house lawyers a useful tool to realise value from their disputes.
Investment Manager, Therium Capital Management
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