At MBM we are pioneers in helping clients find and use litigation funding in Scotland.
In 2015, we secured a victory in the Supreme Court for Mr Carlyle, a property developer in dispute with his bank. The cost of litigating in the Supreme Court would ordinarily put the prospect of a hearing in the Supreme Court beyond most clients’ reach, and Mr Carlyle was no exception. What allowed him to have his day in court was the involvement of third party litigation funders, which enabled Mr Carlyle to pursue a claim he otherwise simply could not have afforded to pursue.
Working closely with our partners in the litigation funding marketplace we have developed a strategy that ensures that the best cases are fully funded through the whole litigation process. Litigation funding can help businesses turn legal problems into commercial investments, and take the risk out of the balance sheet. Litigation can be an expensive and drawn out process and despite having good cases many clients can be put off by the potential cost involved in going to court. However, working closely with our partners in the litigation funding marketplace we have developed a strategy that ensures the best cases have their chance to succeed.
What is litigation funding?
Litigation funding is when a third party pays for the cost of running your case in court. The funder’s share of the proceeds of a successful case is negotiated with the claimant at the outset. This financial reward typically consists of either a percentage of the damages recovered, or a multiple of the amount advanced by the funder, or a combination of the two. If the claim is unsuccessful, you pay nothing, and the funder bears all the costs. In this way a funder will take on the financial risk of litigation, freeing up cash flow for the claimant and shifting the risk off the claimant’s balance sheet.
Why choose litigation funding?
As well as helping individuals fund good case that they otherwise couldn’t have afforded to pursue, litigation funding can help businesses turn legal problems into commercial investments, and can be a particularly powerful weapon in cases where the opponent has deep pockets and can spend heavily on a legal war of attrition. The presence of a powerful backer can be a means which would not otherwise be available of forcing that opponent with greater firepower to the negotiating table, because with TPF backing for the smaller business, the larger opponent is no longer able to outspend the smaller business. In this way, TPF can work particularly well in claims against banks, or professional negligence claims where insurers are involved.
Even if your business can afford the costs of going to court, litigation funding can help you to take the risk out of the balance sheet and to better quantify your yearly legal budget.
- Company X has a claim against Company Y for £800,000.
- It would cost company X £160,000 to complete the court action.
- Company X has a 60% chance of winning.
Think of it as an investment:
If company X invests £120,000, the have a 60% chance of making a £640,000 return. They also have a 40% chance of making a £120,000 loss. Litigation funding negates the risk of this loss.
Simply, litigation funding takes the risk out of litigation and transforms it into a safe commercial decision.
How does Litigation Funding work?
Contact our Litigation Funding Lawyers Edinburgh, Scotland
If you think that you have a case that could benefit from litigation funding, then, please contact a member of the dispute resolution team on 0131 226 8215 or fill out our online contact form.