The Inside Scoop On What Funders Look For In Dispute Finance Cases

Summary

Before investing in litigation, dispute finance experts carefully evaluate the fundamentals of each case to determine the probability of success. The article highlights those fundamentals to help claimants improve their application process.

Are you thinking about applying for dispute finance in Australia? Then, this article is for you!

Litigation funders typically have experienced litigators on their teams to assess each dispute they receive from claimants. Their assessments are thorough and include some fundamental parts of the case.

Today’s article sheds light on those fundamentals to help prepare your application for litigation funding.

So, keep reading!

What Funders Look For In Dispute Finance Cases!

Among many things, most funders typically evaluate these factors when someone applies for litigating funding or dispute finance.

Merits of the claim

Funders will review the strength of your claim, evidentiary support, anticipated defences and counterclaims to estimate the probability of your case’s success. The scope of their review will depend on the type, complexities, status and issues of your case. Also, the funders will take notes of the diligence materials and the litigation counsel’s ability to articulate its case.

Claimant

Your potential funder will inquire about your motivation for seeking the funding, including if you lack the resources to bring the claims to shift risk. Furthermore, the funder will check your prior litigation history to understand your comprehension of litigation.

Claimant’s legal representation

Dispute finance experts will assess the reputation and experience of your legal counsel during the initial screening. If your funder is unfamiliar with your lawyers, they will review the legal team’s track record, experience and the claim type. Moreover, the funder will evaluate the firm’s engagement agreement to grasp the economics of the arrangement to ensure the alignment between the claimant’s and the law firm’s interests.

Litigation budget

Litigation funders provide a fixed commitment to pay the expenses and fees associated with the claimant’s case. So, when you apply for the fund, the funders will review the proposed budget to determine the types of expenses they have to cover and their timings. Furthermore, you or your law firm will have to pay if there’s an overrun of the budget unless there has been a commitment to extending the budget.

Expected damages

The size of your litigation’s potential award should be sufficient to provide your funder with a satisfactory return. The return should match the investment risk and the cost of running the case through the transactional and diligence process of the funder. Regardless of the efficiency or size of the funder, the recovery amount should make for an economically rational investment.

Respondents and recovery

Litigation is a two-party affair, with the respondent playing a critical role in the process. Also, the respondents can significantly influence whether the claimant will receive a sizable award. The worst-case scenario for your funder will be not being able to recover the investment because the respondent is judgement-proof or insolvent.

Wrapping Up

Your application for dispute finance should be detailed and cover all these fundamentals. Also, ensure you choose a licensed funder with sufficient experience to fund the litigation process. Your funder will not just analyse the merits of the case but evaluate your track record as well. So, make sure your application is more rational than emotional. It should leave a good impression on the funder.