Commercial Litigation Funding

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Overview

The rapidly expanding field of commercial litigation finance holds great promise for litigants and investors alike. For businesses that hold meritorious litigation claims but fear the expense and outcome uncertainty of pursuing them, it provides an effective way to mitigate these risks. For law firms, it provides a way to hedge the risk of contingency matters and capitalize sustained litigation efforts. And for investors, it offers an opportunity to diversify into investments with its high yield, non-market correlated returns.

But for all participants in litigation finance, the evolving field is as abundant with risk and uncertainty as it is with opportunity. A Richards Kibbe & Orbe team of corporate and litigation attorneys helps investors, litigants and law firms navigate these risks while extracting the maximum benefit from the deals.

Experience

We assist clients with the negotiation of commercial litigation funding transactions and advise clients throughout the entire life cycle of financed cases. Specifically, we assist clients with: 

  • Claim due diligence: Assessing the strength of litigation funding opportunities, including the merits of the legal claims and additional relevant factors (the time to resolution, special characteristics of the legal jurisdiction and more) impacting the likelihood, amount and timeliness of a return.
  • Transaction structuring: Designing funding transactions, which can be structured in a myriad of ways, to maximize tax efficiency impacts and minimize the risks presented by arcane state law prohibitions, such as usury and champerty.
  • Preservation of privilege: Ensuring that a funder obtains sufficient information to perform an effective risk/reward assessment of the underlying claim without causing a waiver of evidentiary privileges.
  • Funder control: Balancing the funders’ need to monitor the litigation with the risk that it will unduly interfere with the attorney-client relationship.
  • Ethical issues: Advising clients on the rules governing the conduct of lawyers involved in these transactions, including  disclosure obligations, fee-splitting prohibitions and other legal ethics rules.
  • Collection: Assist funders to minimize the credit risk associated with the collection of post-judgment/post-settlement proceeds by obtaining collateral, personal guarantees and other credit enhancements.

Presentations

Publications