The Differences Between Traditional Litigation Funding and Litigation Asset Monetization
Third-party litigation funding (“TPLF”) is a budding industry reshaping commercial litigation in the United States and abroad. Domestically, high-stakes antitrust, securities, intellectual property, business-contract, and other large-damages lawsuits almost certainly mean a protracted and costly litigation process, often to the point where the risk cannot be justified. This situation deters would-be plaintiffs from the commitment and prevents them from realizing the upside. While the opportunity cost can be substantial, many businesses can neither endure the uncertainty nor the possible exposure.
TPLF enables plaintiffs to take on well-funded defendants who may contest the lawsuit with seemingly inexhaustible resources. In turn, plaintiffs incur additional, unplanned expenses that strain corporate budgets. Ultimately, the only feasible way to litigate such a matter is to hedge the risk. Partnering with a litigation funder to shift the risk, namely the burden of legal fees and expenses, allows corporate plaintiffs to focus capital on core business avenues, and if the lawsuit is successful, enjoy the financial reward.
Note that litigation finance can be used proactively, too. Efficiencies are driving more and more corporations with meritorious affirmative claims to move litigation expenses off their balance sheets via TPLF. Whatever the impetus, funding options can and should be viewed as a comprehensive litigation risk management tool. For prospective TPLF clients, choosing a funder wisely can make a huge difference to the partnership, the process, and the outcome.
TPLF firms vary in the type of work they take on, the quality of service, and the breadth of benefits they provide. Traditional litigation funders essentially deliver capital while making a bet on the litigation’s outcome. The price: a high interest rate on the return. What this approach lacks, and what more hands-on firms offer, is a process tailored to clients’ specific needs. Consider Risk Settlements’ Litigation Asset Monetization.
Risk Settlements’ process delves beyond the usual diligence, appraisal, and decision-making of traditional litigation funders. The team takes it further by identifying potential, latent litigation opportunities that could be monetized. At no cost to the business, Risk Settlements assesses probable or pending litigation opportunities in addition to those extant in a client’s portfolio.
Risk Settlements’ team of experienced lawyers and risk analysts develops custom monetization plans for client companies of almost any size or industry. Clients may benefit from immediate monetization. This means that companies receive much needed capital immediately while Risk Settlements takes the outcome risk of ongoing litigation.
For each funding opportunity, the team employs unparalleled proprietary quantitative and qualitative risk analyses supplied by information from the largest database and risk assessment predictive system in the United States.
In addition to being size and industry-agnostic, Risk Settlements will take on a range of funding opportunities like one-off litigation against a vendor, contractor, or competitor, class action opt-out litigation, or participation in a consortium. Risk Settlements’ unique consortium approach works to bring together similarly situated companies seeking to hold one or more defendants accountable by combining resources and building inertia. This strategy reduces litigation costs and enhances leverage for settlement negotiations.
Finally, unlike other litigation financiers, Risk Settlements is also willing and able to assist with litigation. Using a wealth of connections and in-depth industry experience, it can assemble a team of top-talent financial and legal experts to create and execute winning strategies without unduly interfering. In sum, companies who choose to monetize litigation assets with Risk Settlements benefit from its sophisticated process and tactical approach, shedding the risk of loss with only upside to gain.