More and more companies in the Anglo-Saxon world are taking advantage of offers for litigation funding, because litigation funding enables efficient outsourcing and relieves the balance sheet:
- Budgets are very difficult to plan for litigation
- Scarce in-house resources and expertise for managing litigation processes
- The integration of (additional) resources in line with requirements can also have a decisive influence on the success of the lawsuit. Even the probability of success can hardly be determined exactly. By using litigation funding, it is usually not necessary to set accruals for litigation costs that would have a negative impact on the operating result.
- If you have a litigation funder, you allow a controlling authority and benchmarking
The market for litigation funding is currently unclear. Negotiations with litigation funding companies are confidential and the pricing and contractual arrangements are very individual. Companies that only use litigation funding occasionally often lack the know-how for negotiations. Law firms can only compensate for this to a limited extent. They can clarify under which circumstances considerable cost risks remain with the plaintiff, in the case of lump-sum profit-sharing as currently offered on the market. However, whether the amount of the profit sharing is appropriate can hardly be assessed fairly for clients.