Let’s face it: court cases can get expensive quickly. From case filing fees to compensating expert witnesses for their time, it can be intimidating to calculate how you can properly fund your client’s case without overwhelming any budget requirements.
Fortunately, litigation finance can solve core case funding needs and offer benefits to key parties involved. Keep reading to learn what key benefits this financing option can provide plaintiffs, attorneys, firms, and investors.
Litigation Finance Helps Plaintiffs Get Access to Justice
Plaintiffs are typically up against major corporations or insurance companies with endless financial resources to fight their claims.
If a case drags on for years, that could have catastrophic impacts on the claimant’s financial situation. Additionally, if an individual cannot work or afford living expenses, funding can be used to cover personal living expenses.
Lastly, the individual or company may access higher-quality legal resources than they could without an external investor and pursue their claim to the fullest extent.
Litigation Finance Aids Plaintiff’s Attorney Firms with Budget Forecasting
Plaintiff’s attorneys often represent individuals who can lack the resources to pursue their claim in the judicial system.
Litigation finance can cover attorney fees, e-disclosure, expert witnesses, court fees, and other costs incurred in the litigation process. External funding can also reduce the risk of running out of capital in the middle of the process.
Firms can permit their attorneys to enter into flexible repayment agreements, enabling them to take on more clients. Freeing up the firm’s capital makes it possible for the firm to build its portfolio and invest in improving elements of its operational processes, including:
Hiring legal support staff
Automating the client intake process
Establishing marketing strategies
Trial presentation material development
Expanding their practice
Finally, litigation financing helps attorneys achieve recoveries for their clients that reflect the merits and damages of the case.
Investors Can Earn Massive Returns in The Growing Litigation Finance Market
Bloomberg Law estimates investors in the litigation finance industry have increased their assets by 32% since 2019.
Funders find litigation an attractive investment because the industry has steadily grown over the last 20 years.
Investing in litigation is favorable to traditional investments because legal claims are unrelated to the stock market and involve fewer external factors. Additionally, compared to alternative investment options, the time to liquidity is shorter, and there is a higher potential for massive returns.
The future of litigation finance in the US is exciting. Advancements in the industry will continue to increase access to justice for most Americans, historically reserved for the wealthy minority.