To get approved for litigation funding, you have to consider the points that we are going to discuss in this article. Let’s take a further look into the details.
Determining eligibility.
Litigation funding companies specialize in commercial disputes, such as SEC, QUI TAM, or patent litigation. In order to decide on case eligibility for lawsuit funding, these funders will want to assess the likelihood of success of its success before agreeing to provide financing. This can be done through a thorough review of the relevant case law, expert opinions, and other relevant factors. The funding company also must know the estimated timeline for the resolution of your case, as well as any complications, appeals, etc., that may impact the funding decision. For commercial claims, they may consider the current financial situation of your company since most requesting litigation finance are investors or owners of multi-million dollar businesses.
Finding a funding company.
To find a litigation funding company, consider the following steps:
- Start by researching different litigation funding companies to get an idea of the options available over simple google research.
- Compare the terms and conditions of each company, including the fees they charge, to determine which company is best suited to your case.
- Seek referrals from attorneys or other individuals who have used litigation funding in the past.
- Look for online reviews and ratings of different funding companies to get an idea of their reputation and level of customer satisfaction.
- Contact the funder to discuss your case and ask any questions you may have.
Applying for funding.
The litigation funding process for commercial claims typically takes two months to process. To apply for litigation funding, follow these steps:
- Prepare a summary of your case, including relevant documents and information about the likelihood of success.
- Submit a funding application to the chosen funding company.
- Provide any additional information that the funding company may require, such as tax liens or any other liens that you may owe.
- Wait for the lender to review your application and determine if they are willing to accept your case.
- Ensure your attorney is present and always responds to all questions from the lender while providing the required documentation.
Reviewing and negotiating terms.
Review the funding agreement offered by the company and make sure you fully understand the terms and conditions, including any fees or charges that may apply. To review and negotiate the terms of the legal funding contract, follow these steps:
- Carefully read the entire funding agreement, paying close attention to the terms and conditions.
- Consult with your attorney to understand the legal implications of the agreement and to negotiate any terms on your behalf.
- Negotiate any fees or charges, such as administrative fees or interest charges.
- Review the terms and conditions related to repayment of the funding amount, including any penalties or fees that may apply in case of default.
- Have your attorney request any changes or modifications to the agreement that you feel are necessary to protect your interests.
Getting your legal representation on board.
It is advisable to get legal representation present during every step of the process. An attorney can help you:
- Ensure that the agreement is fair and equitable and that it protects your rights and interests.
- Negotiate the terms of the agreement with the funding company, including any fees or charges, to ensure that you receive the best possible deal.
- Offer legal advice and guidance throughout the process, including any legal implications of the agreement.
- Represent you in court if necessary, to ensure that your rights and interests are protected.
By getting advice from legal representation when seeking litigation funding, you can ensure that your rights and interests are protected and that you receive the best possible outcome for your case.
Capital disbursement.
The capital that is disbursed under a commercial litigation funding agreement is typically used to pay for various expenses related or unrelated to the case, such as:
- The capital can be used to pay the legal fees incurred by your attorney while representing you.
- If expert witnesses are required in your case, the funds can be used to pay their fees.
- Court costs, such as filing fees or deposition fees, can also be covered by the disbursed funds.
- Other expenses related to the case, such as travel expenses for witnesses, can also be covered by the funding agreement.
- Business expenses.
Repayment.
Repayment of litigation funding occurs once the case has been resolved and the proceeds have been received. The repayment process typically involves the following steps:
- Part of the proceeds will be used to repay the funding company, as mentioned in the litigation funding lien, along with any agreed-upon fees or charges.
- Some funding agreements may include interest charges that accrue over time, which will also be included in the repayment amount.
Final words
It is important to fully understand essential parts of how litigation funding works before signing it to ensure that you get a good contract. Litigation funding is a great way to monetize a claim, but if you get into an agreement that does not favor you, you may end up losing more money once your proceeds are received.
Consider carefully understanding this method of funding, and always seek the advice of your attorney before getting into this type of financing.
