What is Litigation Finance (also known as Litigation Funding)?
Litigation finance refers to third party financing of contingency based claims. Plaintiff litigation funding may finance the law firm pursuing the claim directly, the plaintiff (business or individual), or both. Financing litigation can involve commercial litigation or lawsuit loan companies.
Litigation funding allows contingency cases of any kind, to be decided on the merits of the case and not on the financial resources of either party. Litigation financing is often referred to as advance on pending lawsuit.
An Example of Litigation Funding
One high profile example of a third party providing capital to a plaintiff in exchange for a portion of a potential recovery is Terry Bolea’s case against Gawker. In this case, the financing was provided by Peter Thiel as financing and Oasis Loans