Background - Practices (Details)

Litigation Finance

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The rapidly expanding field of commercial litigation finance holds great promise for litigants and investors alike. For businesses that hold meritorious litigation claims but fear the expense and outcome uncertainty of pursuing them, it provides an effective way to mitigate these risks. For law firms, it provides a way to hedge the risk of contingency matters and capitalize sustained litigation efforts. And for investors, it offers an opportunity to diversify into a novel asset class with high-yield, non-market-correlated returns.

But for all participants in litigation finance, the evolving field can be as abundant with transactional risk and legal uncertainty as it is with opportunity. Our team is able to help investors, litigants and law firms navigate these risks while extracting maximum financial benefit from their deals.

We assist clients with the negotiation of commercial litigation funding transactions and advise clients throughout the entire life cycle of financed cases. Specifically, we assist clients with:

  • Transaction structuring: Designing funding transactions, which can be structured in a myriad of ways, to maximize tax efficiency impacts and minimize the risks presented by arcane state law prohibitions, such as usury and champerty.
  • Preservation of privilege: Ensuring that a funder obtains sufficient information to perform an effective risk/reward assessment of the underlying claim without causing a waiver of a litigant’s evidentiary privileges.
  • Funder control: Balancing a funder’s need to monitor the litigation process with the risk that it will unduly interfere with a plaintiff’s attorney-client relationship.
  • Ethical issues: Advising clients on the rules governing the conduct of lawyers involved in these transactions, including disclosure obligations, fee-splitting prohibitions and other legal ethics rules.
  • Collection: Minimizing a funder’s credit risk associated with the collection of post-judgment/post-settlement proceeds by implementing collateral, personal guaranty and other credit support structures.