Chicago Business Litigation Lawyer Blog
Litigation can be an expensive proposition. It used to be that a company with a great claim may not have had the ability to assert that claim because it lacked the ability to pay for the litigation it would take to enforce its rights. Commercial litigation funding has changed this.
Commercial litigation funding (also known as litigation finance) is the provision of capital to a plaintiff in exchange for a portion of any future settlement or judgment. Litigation funding is not a loan because it is non-recourse, meaning the plaintiff does not owe anything unless it recovers in the underlying lawsuit. It is this non-recourse aspect of litigation funding that causes some companies that have the means to fund their own litigation to turn to litigation funding as a means of managing the risk of litigation. There are myriad other reasons companies turn to litigation funding as well. It helps businesses avoid tying up capital that can be used as working capital during the pendency of the litigation. It reduces the risk of a company being forced to accept a low-ball settlement offer as a result of running out of money to fund a lawsuit. On a related note, it grants access to justice by permitting the proverbial Davids take on the proverbial Goliaths without fear of being spent out of the lawsuit. It also allows attorneys to take on cases that they wouldn’t otherwise be able to take for clients who have great claims but do not have the money to fund a protracted lawsuit. Continue reading ›