Litigation Funding Assessment

The basic parameters of a fundable claim are that:

• The claim should have good prospects of success against a solvent defendant; and
• The claim value should be for a sufficient multiple of the likely costs. For example the claim should normally be worth at least 6 times the costs of pursuing it all the way through trial. As a rule of thumb, claims will need to carry a quantum of at least £3mm in order to be fundable. There are no upper limits in terms of costs or the quantum of damages.

Breaking this down a little further, each potentially investable case is assessed on a variety of factors, principally:

• Merits – What are the strengths and weaknesses of the legal arguments and of the supporting evidence?
• Quantum – What level of damages is likely to be achieved on success at trial or on settlement?
• Recoverability – Is the Defendant good for the money?
• Time – How long will it take to achieve resolution including the risk of appeal?
• Costs – How much will the Claimant’s costs turn out to be; what is the risk of over-run; how will the adverse costs risk be dealt with?
• Variability – How likely are each of the above factors to change?

In principle, we work with the case materials that are available. Ideally, in order properly to assess the risk, we like to see and evaluate the following items before a decision can be taken:

• The principal documents (contracts, correspondence etc.) relied on in the case;
• Any witness statements that have been prepared;
• Any Court documents that have been filed;
• A written legal opinion dealing positively with the merits;
• A written, legally coherent justification of the quantum sought in the claim;
• A written estimate of the costs to be incurred in pursuing the claim.

However we do recognise that, depending on the stage the preparations of the case have reached, some of these documents might not be immediately available.