Remember that our services are free for you and the only costs involved are between you and your funder, as explained
First and foremost, litigation funding is based on a ‘no win – no fee’ rule which means that if a claim is unsuccessful,
you owe nothing (a.k.a. ‘non-recourse financing’). It is normal for funders to see some claims fail and they simply
accept it as an investment risk.
The only situation when litigation funding represents a cost to you is in the event of the successful outcome of your
claim. However, even then, your repayment is limited only to the value of the proceeds. In other words, you would never
pay more than what you win from the case.
Every funding agreement gives the funder the right to be repaid the investment capital plus a portion of the claim’s
payout. The portion can be defined as either a percentage share of the amount recovered (after costs) or as a multiple
of the invested amount. The higher the risk associated with your case, the bigger that portion is going to be.
For example, if $2 million is financed to pursue a case with an expected value of $20 million, then in the case of an
agreed percentage share of 30% the funder receives $6 million of the proceeds (30% of the expected $20 million). The
same amount would need to be repaid if the terms would involve a multiple of 3x (three times the $2 million invested),
instead of a percentage of the recovery.
Even though the market is changing dynamically with prices rapidly dropping, litigation funding is still expensive. The
reason is that funders must be able to offset their losses on unsuccessful cases with profits on successful ones. Thus,
the expected financial returns for funders are more consistent with private equity and venture capital funds, rather
than commercial banks. We have seen 15% - 60% shares and multiples in the range of 1.5x – 6x.
So what can you do to reduce the cost of your funding? Apart from presenting your case in a manner that helps to realize
the high probability of winning, there are two ways of lowering the price. Firstly, you can seek funding from multiple
respectable funders at the same time and leverage the competitive pressures to obtain better rates. This is what we help
you with here at Litwyn. Secondly, instead of submitting a single claim, you can add additional ones and package them
into a ‘portfolio’ of cases. Portfolio financing is much more attractive for funders, as it allows to distribute the
risk of losing one case across the rest of the cases in the portfolio and, thus, reduce the price of funding.