Due to the growth in awareness of litigation finance, an increasing amount of claimants and attorneys now have access to capital to litigate valid claims and grow their firms. However, for many claimants and lawyers, the funding process is new and opaque. Furthermore, lawyers typically are not trained in the skills required to successfully secure funding.
Each funder will have a slightly different decision-making process. Nonetheless, each is interested in the same type of information. Therefore, a claimant or attorney that is seeking funding can profit from the following principles in preparing a case for financing.
Adhere to Best Practices
Courts have generally been reluctant to allow discovery of documents used to procure third-party funding. Nonetheless, best practice dictates that the claimant/attorney enter an NDA/Common Interest Agreement with each potential funder prior to sharing any written information. Since each new prospective funder will have a different due diligence process and require time and effort to work with, it is helpful to perform some simple due diligence on the funder. Understanding the size of investments, whether they have dry powder (capital available to invest) and even asking for references from prior clients are simple steps to assure you are dealing with a potential fit for your matter.
Make It Easy on the Funder
Funders are inundated with matters seeking financing. The choice of where to spend their time is often dictated by the amount of effort required to understand the basics of the case. Simply emailing over the entire docket is rarely effective. Instead, a concise overview of the case that provides all the basic details of the matter is essential to start the funding process. At TheJudge we provide a template for each case-type, however, we are happy to receive the information in a different format. Format matters far less than content. Information that should be in this overview includes, case-type and overview of facts, funding sought, potential damages, venue, stage of proceedings, and fee arrangement. The best overviews anticipate potential sticking points in the case and address these head on.
Understand and Drive the Process
As noted above, each funder will have a different process for assessing a case for funding. Those seeking funding should ask about this process in detail and be active in setting deadlines for each step in the process. Furthermore, claimants and attorneys should be active in pushing the potential funder to provide all due diligence requests in bulk rather than engaging in piecemeal requests.
The funding process remains non-standard and depending on the particular funder the timelines can be lengthy. By adhering to the principles above a claimant/attorney can increase the chances of securing funding in a timely and (as much as possible) stress-free manner.
At TheJudge, we have brokered thousands of litigation finance and insurance transactions over our 18 year history. We know the pitfalls and challenges in securing funding better than anyone. We provide clear and transparent guidance throughout the process and focus getting a suitable funding deal done in the shortest possible timeframe. Please contact us to discuss your requirements.
Vice President and General Counsel
t: +1 (877) 766 8958
Email Brett here