Litigation funding is revolutionising the legal landscape and here we will look at four models and their pros and cons.
The basic model is an investment relying on securing an appropriate return.
Let’s see how those models work, but always remember that you can find information on litigation funding online at sites such as https://www.novo-modo.co.uk/litigation-funding.
Assignment
Here, the client’s rights are assigned, and a third party is responsible for pursuance. The funder will have a say in the lawyer. Although popular in the US, Australia and parts of Europe, so far it has gained little traction in the UK.
A pro is that the client does not have the stress of day-to-day involvement, but a con is that many cases do need the involvement of the client in terms of evidence.
Full Funding, Legal Team Appointed
Here, the case is brought by a lawyer to a litigation funder, having advised a client who may not have the money to proceed.
A pro is that the funder will be able to assess the merits and have an idea of costs. A con is that the individual or company concerned is not involved in the process.
Funder Active Participation
Here, the funder will have been approached to assess a case and will carry out their own analysis. They may employ counsel to assess it on the merits before a decision.
A pro is that the independent advice may result in a change of strategy. A con is that the provider may not take part once their advice has been assessed.
Brokerage
This involves the initial client recognising the need for help with litigation funding and approaching a brokerage firm. A solicitor may also opt for this approach if the client does not have the funds to proceed.
A pro is that brokers may be able to advise on an appropriate firm to undertake the work if the client does not have anyone prepared to take on the case. A con is that any firm approached may wish to assess the merits of the case again.