As we saw in our previous blog, How Litigation Funding Can be a Transformative Tool for General Counsel https://wilddog.mu/how-litigation-funding-can-be-a-transformative-tool-for-general-counsel/ in which, ultimately, litigation funding permits companies the ability to hedge some of their risk, ensuring that they will be in a better position if the claim is successful, but in no worse position if their claim is unsuccessful. Thus, funding transforms litigation from a traditional “win-lose” proposition to a “win-don’t lose” proposition, as litigation funding is provided on a non-recourse basis.
This article looks at the five benefits litigation funding offers General Counsel.
Five Benefits Litigation Funding Offers General Counsel
1. Lowering Risk
Litigation can have a harmful effect on a company’s financial statements, and a General Counsel is very aware of this. However, when it comes to the balance sheet, claims aren’t listed as assets, but out-of-pocket litigation costs and paying attorneys are certainly included in the liability column. So General Counsel understands that with the aid of litigation financing, which is non-recourse, they can safeguard the company’s legal rights while also being able to assign the high litigation costs off the balance sheet. This means it’s easier for General Counsel to persuade the Finance Department and the Board of Directors to take on a lawsuit. They will be able to see that the litigation won’t lead to financial stress and will instead be in the company’s best interest. And that’s all because non-recourse litigation funding doesn’t require a monetary commitment from the company.
2. Hire the Best Attorneys
Choosing the right person for the job is essential, and this is true for any job. The probability of a victorious lawsuit largely depends on the skill and knowledge of the attorneys. So when it comes to litigation lawsuits, with the support of litigation funding, General Counsel can choose their attorneys according to who is best qualified for the case and not have to worry about the budget. When General Counsel can work with a litigation funder, advancing the company’s case is easier as litigation counsel can be selected at will, and any local or specialized attorneys can be called upon where necessary, without worrying about the costs.
3. Unbiased Validation
As previously mentioned (A Look at the Litigation Funder’s Underwriting Process https://wilddog.mu/a-look-at-the-funders-underwriting-process/ ), with litigation funding comes a whole lot of research and investigation into any claim and whether there is a case to be made or not. What this means is that General Counsel can also use litigation finance as a way of validating the lawsuit’s claims. And there’s no cost for this. It’s just a part of the package. For example, suppose a litigation funder is inclined to finance a claim and put its investment capital into a lawsuit. In that case, there is a high chance of affirmative support for the claim. The due diligence process of a litigation funder is stringent. It involves hours of expert legal and financial assessment and study before a decision to financially back the claim is made.
4. Complete Support
Another way litigation funders can help General Counsel through litigation is by helping to set up the engagements and fees. They can help manage the proceedings’ expenses by structuring meetings and arrangements and help General Counsel by bargaining for discounts and attorney fees with the law firm. Although they can help in this regard, litigation funders are passive investors. General Counsel has complete control over the decisions in the lawsuit process and the company’s claims. But General Counsel understands that with litigation funders comes an extra layer of expertise and support.
5. Strategic Benefits
A fully equipped litigation funder comes with a basket full of strategic benefits and a range of knowledge that can affect the subtleties of a case. One such benefit is that with financial investment through non-recourse funding, General Counsel can reach a settlement faster and usually with a better outcome. One of the reasons for this is that General Counsel doesn’t feel any financial pressure to accept a low payment. And of course, the court and the defendant are sent a strong message when they see the expertise of a litigation funder is behind the claim. It shows them that recovery is presumed.
General Counsel’s function often prioritizes risk over its broad and varied law priorities. Without litigation funding, the only option for taking on a claim would be to invest substantial company’s resources and time into a lawsuit. And this doesn’t make good financial sense. But legal claims can be a good business opportunity with the backing of litigation funding. Therefore, General Counsel must advise their company’s board of directors to consider the operational advantages of litigation funding when the option is suitable. In other words, when they see the potential for lucrative claims by hiring the best attorneys and accessing a fully resourced lawsuit. Again, this means no additional cost or risk for the company.
If you want to stay up-to-date with what is going on with non-recourse litigation funding, Wild Dog serves as a trusted advisor to attorneys and their clients who are exploring litigation financing. So follow our LinkedIn Page for the latest updates on https://www.linkedin.com/company/wild-dog-mu or visit our website https://wilddog.mu for more.