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Civil Litigation

May 12, 2023

How third-party litigation financing works, and who benefits

Litigation financing levels the playing field between the plaintiff – whose funds are limited – and the liability insurance carrier, which has a seemingly endless supply of funds available to it.

“Litigation financing” (also known as litigation funding or legal funding) basically describes the provision of money by a third-party litigation financer unrelated to the lawsuit, to a plaintiff in litigation in return for a portion of the financial recovery (settlement, award, judgment, verdict or otherwise) the plaintiff obtains. If the plaintiff recovers nothing, the litigation financer also receives nothing, as these are “non-recourse” transactions. Such transac...

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