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Litigation funding enables a party to litigate or arbitrate without having to pay for it upfront, either because they are unable to pay for it or because they choose not to.
A third party professional funder can pay some, or all, of the costs associated with a dispute, in return for a share of the proceeds of the dispute if it is successful. If the litigation is not successful, the funder bears the costs it has agreed to fund.
Commercial Litigation funding is a maturing market in Australia, with funders ranging from smaller syndicates of high net-worth individuals to international institutions capitalised into the hundreds of millions of dollars.
Litigation Funding Criteria
The principal assessment criteria which will determine whether your case will attract funding, and the terms upon which it will attract funding, typically include:
- Good Prospects: a good claim is one which is likely to succeed if the matter were to be judicially determined. Written advice from senior counsel confirming prospects of success will usually be viewed favourably.
- Quantum: the size of loss suffered must be sufficiently large to warrant a significant investment of time and money. An investment should always be proportional to the sum in dispute.
- Realisable Assets: it is pointless going to the trouble and expense of litigating a matter to only receive a pyrrhic victory. A judgement you obtain must be enforceable against assets, such as real property, a well established corporation or an enlivened insurance policy.
- Leverage: a claimant with leverage outside the litigation, such as the threat of bad publicity during a sensitive period or the possibility that the litigation will uncover other (criminal) illegality, can often pressure a defendant to settle for a reasonable sum quickly. The prospect of a quick and cheap resolution of a case is attractive to potential funders.
Litigation funding can take many forms, including disbursement-only funding, blended funder-risk share arrangements or full funding.
With extensive funder contacts, we are highly experienced in securing litigation funding for all manner of meritorious claims.
We believe in offering our clients flexible and transparent pricing arrangements to suit their preferences and commercial imperatives.
Depending upon the matter, we can offer you the following pricing options:
1. Hourly rate pricing: this is the legal industry standard method of billing. The amount of time spent working on a matter is the amount that will be billed, irrespective of outcome or value to the client. This option works best where there is a relationship of trust in which the scope of work is difficult to accurately price.
2. Fixed fee: this is an arrangement for the completion of defined piece of work at a fixed cost. This option gives the client cost certainty in terms of cost. This type of pricing is most suitable for reasonably simple matters lacking any unpredictable variables (e.g. a conveyance).
3. Capped fee: a capped fee is similar to the hourly pricing arrangement except the client stops paying after a certain “cap”. This provides costs certainty to the client as they will know the maximum amount that they will be liable to pay, with the possibility of a lower amount being payable if the work is completed more efficiently than the cap allows. This arrangement is generally suitable for medium complexity work with a limited number of material variables.
4. Risk sharing arrangement: an arrangement whereby the law firm agrees to receive only a proportion of its professional fees billed with the balance payable on the successful conclusion of your matter. Disbursements are typically payable paid in full. This type of arrangement typically works well in complex large-scale litigation such as class actions.
5. Monthly retainer: this arrangement requires the client to pay a fixed amount every month in return for services which have a reasonably predictable steady flow. This is usually suitable for regular low complexity work with few to no variables.