Litigation funding has become an essential tool for law firms seeking to pursue complex, high-value disputes without carrying the full financial risk on their own balance sheets. In theory, the market is well-capitalised and actively looking for deployable cases.
In practice, however, many lawyers still struggle to secure funding, even for claims they believe are strong and meritorious.
Based on repeated interactions between law firms and funders across multiple jurisdictions, five recurring issues consistently stand in the way.
1. Merits Are Not Presented with Commercial Rigor
Lawyers are trained to argue cases; funders are trained to price risk. A common disconnect arises when legal merits are explained persuasively, but not commercially.
Funders are not looking for arguable cases, they are looking for probabilistic outcomes. This requires:
- Clear liability theories
- Evidentiary strength mapped to each cause of action
- Realistic success probabilities (not optimism)
Where merits are framed as advocacy rather than analysis, funders struggle to underwrite risk with confidence.
2. Damages Are Overstated or Poorly Substantiated
Inflated damages claims remain one of the fastest ways to lose credibility with a funder.
Funders expect:
- A defensible damages methodology
- Independent or expert-driven calculations where possible
- Clear downside, base case, and upside scenarios
When damages are presented as a single, headline number without transparent assumptions, funders often assume the case has not been stress-tested, and discount it heavily or decline altogether.
3. Budgeting Lacks Discipline and Visibility
From a funder’s perspective, litigation is an investment project. If the budget looks like a rough estimate rather than a costed plan, the risk profile immediately increases.
Common red flags include:
- No phase-by-phase budget
- Missing contingencies for interlocutory risk
- Unrealistic timelines to resolution
Funders need to understand not just how much capital is required, but when and why. Poor budgeting creates uncertainty that capital markets dislike.
4. Misalignment on Risk Sharing and Economics
Many lawyers approach funders with a binary mindset: “fund the case or don’t.” Sophisticated funders think in terms of alignment.
Challenges arise where:
- Law firms are unwilling to share meaningful downside risk
- Fee structures are inflexible or disconnected from outcomes
- The economics disproportionately favour one party
Funders are far more receptive when law firms demonstrate confidence through aligned risk sharing, whether via partial contingencies, deferred fees, or success-based upside participation.
5. The Case Does Not Fit the Funder’s Mandate
Not every rejection is about quality.
Each funder has defined parameters around:
- Case size and capital deployment thresholds
- Jurisdictional risk appetite
- Duration and enforcement complexity
Lawyers often waste time approaching the wrong funder, or presenting a case before it has reached the scale or maturity required for funding. Targeting matters as much as substance.
Litigation funding is no longer novel, but it is still misunderstood.
The firms that secure funding most consistently are not necessarily those with the “best” cases, but those that present cases in a way that speaks the language of capital.
Treating litigation funding as a commercial partnership, rather than a last-resort financing option, is often the difference between rejection and approval.
If lawyers adapt how they package, price, and position risk, funding becomes far less elusive.
A Practical Solution: Structuring Cases the Way Funders Expect
The challenges outlined above are not structural flaws in the litigation funding market, they are execution issues. In most instances, funders decline cases not because they are unmeritorious, but because they are not presented in a way that allows capital to be deployed with confidence.
One increasingly effective solution is for law firms to work with specialist litigation funding advisors at an early stage of case development, such as Wild Dog at the intersection of legal strategy and capital markets. Rather than acting as a funder, Wild Dog helps lawyers prepare, structure, and position matters so that they meet funders’ underwriting criteria from the outset.
This typically includes:
- Stress-testing merits and evidentiary risk through a funder lens
- Developing realistic, defensible damages models
- Building phased, transparent litigation budgets
- Structuring aligned economics between claimants, counsel, and funders
- Matching cases to funders whose mandates genuinely fit the matter
By addressing the core reasons funders say “no” before a case ever reaches an investment committee, lawyers materially improve their prospects of securing funding, and often on better commercial terms.
In short, litigation funding is not just about having a good case. It is about presenting a bankable one. Leveraging experienced intermediaries who understand both law and capital can turn a strong legal claim into a fundable investment opportunity.
If you want to stay up to date with what is going on with ATE insurance and non-recourse litigation funding, Wild Dog serves as a trusted advisor to attorneys and their clients. So stay informed. Stay competitive and subscribe to our Newsletter today.