What is commercial litigation funding and what are the benefits?
Commercial litigation funding is a financial arrangement where a third-party funder like LFG provides capital to cover the costs associated with commercial litigation or otherwise monetizes a stakeholder’s interest—in exchange for a share of the potential proceeds if the case is successful. The “successful” part is key—the defining characteristic of litigation funding is that the funder’s recovery is limited to the case proceeds, except in very limited circumstances. In short, LFG only wins if you win. If you don't win, LFG loses its capital and you have no obligation to pay us back.
This attractive feature of litigation funding makes it an ideal tool for corporate claimants and law firms to access capital without incurring additional debt, mitigate financial risk, level the playing field against well-funded opponents, and pursue meritorious claims that might otherwise be financially prohibitive.
How does the litigation funding process work?
There is no cost to apply. Upon receiving a funding request, we conduct a preliminary screening and evaluation of the case based only on non-privileged information. After this review, if the case meets our investment criteria, we make a financing offer. Once commercial terms are reached, we complete final due diligence, which includes hiring independent counsel to review the merits of the case.
The timeline for funding approval depends on the complexity of the case and the diligence required. But this is where LFG shines – when you work with us, you get direct access to the decision-makers from the beginning, which makes it simpler to expedite the process, provide timely decisions (often within a few weeks), and avoid any late surprises from an external investment committee.
Does LFG dictate how the money is spent?
In many circumstances, no. Assuming that the attorney engagement is accounted for, we do not typically mandate a particular use of funds. When we fund the attorney’s fees and costs, we act as a passive source of capital and leave the details to the attorney and their client.