⚖️How does litigation finance work?

While filing a lawsuit, the claimant needs money for a variety of purposes like lawyer’s fees, transportation and logistics charges, and many more. Sometimes people can’t afford these fees, and the other party is richer than them, which leads to unfair court settlements. This is where investors come into the picture. They help the claimant win the case and charge a certain amount of profit for it.

The process takes place over three steps:

• Funding - funds are provided to the claimant by the investor

• Court trial - the lawsuit gets filed and the court trials are ongoing

• Profit-sharing - If the claimant wins the case, the promised amount from the profit gets shared with the investor

Several firms offer litigation financing to the plaintiffs by taking in the money from the investors. So the investors don’t have to get involved in the case and just enjoy the returns. These firms carefully study the market and approve the cases which they believe are going to win.