We are delighted to announce that we have recently agreed to work with two new litigation funding providers, making a total of 12 funders participating on our panel.
12 funders may seem like a lot to some and not many to others. For us, it’s less about the number and more about the quality. There are plenty of ‘funders’ who approach TheJudge as a source of referrals but frankly don’t make the grade in terms of our requirements.
It often surprises us when some lawyers say they “know all the funders”. The reality is that most lawyers could name maybe 3 or 4 of the most heavily publicised funders in the UK. But, as with prospective litigants, many funders are to be found off-shore, particularly when it comes to specialist areas such as international arbirtation, patent litigation, cartel cases and international securities actions.
What’s more, appetites are changing continuously within the funding market. Indeed, in the past 6 months, we’ve seen some well-known funders have their wings clipped by their principals, meaning they’ve had to lower their maximum funding contribution for any individual case. Another funder is about to reach its current capacity of available funds which has meant management time is now largely spent fund-raising rather than considering new applications. The fact is that the market is fluid and lawyers need to stay flexible and up to date when engaging with it.
Anyone who has dealt with the litigation funding market will know that rejection rates are high, and this is something which many funders are transparent about. The funders are understandably selective in what they will consider, but that selection process itself is highly subjective. For example, whereas one funder might reject an investment treaty case due to a concern about enforcement, another may well be actively seeking such cases because their own skillsets enable them to add value. One thing that most funders do share in common is the reluctance to consider cases which have already been rejected by prior funders. As one very well publicised funder recently advised “the general response to looking at previously rejected cases is not positive”.
In order to protect your clients and avoid their applications for litigation funding being prejudiced, a clear strategy regarding engaging with the market should be devised before approaching any providers. This requires real-time knowledge of the available funders and who best to approach with the case on that given day. Remember, the WIP incurred in looking for funding is not a recoverable cost for the client. With better planning, the cost saving to the client and time saving to the lawyers can be significant.