How Litigation Funding Influences Case Outcomes

Litigation funding helps people involved in lawsuits fight for their claim until it concludes. These claims might otherwise be abandoned due to expensive legal fees. The funder provides the funds to plaintiffs who need money to pursue the claim for their own benefit.

The impact of litigation funding goes beyond the financial terms. It can shape the outcome of cases in these ways:

Getting Top-Notch Legal Representation

Litigation funding allows litigants to hire the most competent lawyers from the best law firms in the country. A highly qualified lawyer can significantly impact how your case will unfold. Now that a funding agreement is in place, the litigant can use the money to pursue their claims.

Reduced Financial Pressure

The legal costs can put a huge strain on your shoulders as you pay various legal fees. Litigation funding wants to take off that pressure by providing you with funds. This financial assistance helps set your mind on building a solid case rather than worrying about legal expenses.

Enhanced Litigation Strategy

Securing funding to pay for litigation costs allows you to pursue an enhanced and aggressive litigation strategy to win the case. The aggressive strategies lawyers may use, especially when the stakes are high, include:

• Filing motions: Lawyers can file numerous motions to challenge the opposing party’s claims or exclude evidence to assert dominance.
• Vigorous discovery: Lawyers can pursue this tactic to seek extensive documentation and evidence from the opposing party to weaken its case.
• Scorched-earth: This tactic involves overwhelming the opponent with various requests and motions so that they would settle with a favorable agreement.
• Aggressive cross-examination: Lawyers can cross-examine witnesses aggressively to undermine the opposing party’s testimonies.
• Public relations campaigns: For high-profile cases, lawyers shape the public’s opinion of the opposing party through the media.

These strategies can be costly but doable for litigants backed with litigation financing.

Provides an Even Playing Field

Litigation finance allows all parties to have a fair shot at winning the case. You now have the same access to legal resources as your opponents, which can lead to fairer and better outcomes if you use them wisely.

Encourage Settlements

Litigation funding can help parties settle their disputes outside the court. Litigation funders prefer settlements that give a significant return on their investment. This can make way for a more favorable and earlier settlement agreement for you.

Litigation funding also indicates to opposing parties that a litigant is pursuing the case seriously, which may lead to higher settlement offers due to the risks and costs of more extended litigation proceedings.

Expand Scope of Legal Claims

With funding agreements from the litigation funder, you can pursue a legal claim that you think is costly or risky. This could help you reach a favorable outcome and increase your chances of winning a case.

Some of the claims you can pursue using litigation funding are:

• Personal Injury: You can use your litigation funds to get compensation for accidents, product liability, and medical malpractice.
• Commercial Disputes: Use your commercial litigation funding to pursue disputes for breach of contract claims and intellectual property (IP) disputes.
• IP Disputes: You can finance your copyright infringement, trademark disputes, and conflicts with patents for your creative work or invention through litigation funding.
• Employment Disputes: Claims like wrongful termination, harassment, and discrimination that relate to employment can be pursued through litigation funding.
• Environmental Disputes: Pursue compensation for ecological harm like pollution, damage to property, and exposure to toxic chemicals.
• Insurance Claims: Pursue this claim using your litigation funds for compensation following a car accident, medical treatment, or property damage.

Minimize Litigation Risk

Litigation funding gives funds non-recourse, which means the plaintiff won’t pay anything if they lose the case. The litigation risk is now on funders who provide the funds without making plaintiffs pay upfront fees.

Promoting Transparency

Litigation funders often want transparency as the case progresses. As stated in the Litigation Funding Transparency Act of 2021, “This bill requires lawyers for plaintiffs in certain lawsuits to provide the court and other parties in the lawsuit with any agreement that entitles an outside business (i.e., a business that is not a party, class member, or counsel in the lawsuit) to receive payment contingent on the lawsuit's outcome. The lawyers for the plaintiffs shall also provide the identity of the outside business.” The bill also allows courts to control disclosure to an extent to protect specific information.

Set Precedents

Litigation funding can affect the legal system. It sets examples that funded cases by litigation funding Australia experts with favorable outcomes can help shape future legal strategies in other similar cases. The litigation finance industry is small, and as it grows, more legal strategies may emerge from successfully funded cases.

Final Words

Litigation funding may provide funding for plaintiffs who lack financial resources to fight for claims, but it’s more than that. It removes the financial pressure on the litigant when they lose the case. It also allows a fairer playing ground for them to win and might influence upcoming legal strategies. As the litigation funding industry evolves, its impact on case outcomes will be more evident and can shape how the legal industry works.

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