Litigation finance is a form of corporate finance
Used by both litigants and law firms to pay for legal costs, legal finance is a fast-growing alternative to other means of financing litigation (such as self-funding or bank borrowing). The underlying asset is one or more legal claims. In its simplest form, the financing covers expenses related to litigation in exchange for a portion of the awarded damages or settlement recovery. More sophisticated options can provide even greater amounts of capital.
By taking on the costs and risk of litigation and arbitration, legal finance increases access to justice for aggrieved parties by enabling them to pursue meritorious cases using their preferred legal counsel. It levels the playing field between deep-pocketed defendants and smaller plaintiffs with lesser financial resources, and enables plaintiffs – and their law firms – to go the distance in pursuit of justice.