Tag Archive: third-party funding

Using Legal Funding for Law Firm Financial Management

When a law firm has a contingency fee practice, it often has a problem with effectively using its capital.  The partners of the firm have to commit their retained earnings and other capital assets to covering the litigation costs associated…
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Portfolio Financing for Law Firms

Third-party legal funding is becoming a more powerful force in the market for legal services, as more and more litigants realize that they can improve their chances in litigation by obtaining non-recourse financing.  But there is more to third-party financing…
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Litigation Finance as the Factoring of Legal Receivables

As we’ve noted in other editions of this blog, it is commonplace for critics to describe litigation funding as a novel practice that threatens to undermine well-established practices and traditions in the legal system.  There are many reasons why this…
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Fundamentals of Sound Litigation Financing

As more and more capital is directed to litigation finance, there are increasing calls for regulation that would make litigation finance “safe.”  As in other aspects of the economy, however, the first question should not be how to regulate but,…
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No Licensing of Litigation Funders in Australia

There are many proposals for regulating the litigation funding business and many different models for regulatory regimes.  One model calls for treating litigation funders like consumer lenders, subjecting them to certain financial requirements and requiring them to be licensed.  In…
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Why Mandatory Disclosure of Third-Party Litigation Funding Is a Bad Idea

One widespread response to the rise of litigation funding is a call for the mandatory disclosure of any litigation funding arrangements.  Advocates of mandatory disclosure contend that it is necessary to bring litigation funding “out of the shadows” and to…
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Small-Scale Litigation Finance Is Not a Threat to Increase Meritless Litigation

One of the many prevalent criticisms of litigation financing is that it will promote more litigation and more unmeritorious litigation.  Those who level this criticism contend that more widely available financing will make it easier for litigants to continue lawsuits…
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Why Litigation Finance Is Not Like Payday Lending

The critics of litigation financing often like to equate making investments in legal claims with issuing “payday” loans.  Through this equation, they contend that litigation financing is an exploitative practice in which uninformed, helpless individuals make unfair bargains with powerful,…
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The Problem of Discovery about Litigation Funding Arrangements

As litigation funding becomes more prevalent, it is subject to increasing scrutiny, including in discovery in cases where one of the litigants receives funding from a third party. When a litigant does obtain litigation funding, that party’s attorney must take…
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Variations on the Litigation Funding Model

Third-party litigation funding is most commonly understood as a method by which an investor funds all of the litigation costs for a party throughout an entire case in return for a share of the party’s ultimate recovery.  But as litigation…
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