Litigation finance is a type of funding where a third party offers financial assistance to the claimant in return for an agreed financial return if the case succeeds. This can be as either a percentage of the profits or the return the funder receives on their investment.

If the lawsuit is unsuccessful, the funding company receives no money and its investment will be lost.

The Legal Services Board commissioned Professor Rachael Mullheron KC of Queen Mary University of London to conduct a study to determine whether litigation financing improves consumer protection, strengthens regulation and enhances access to justice.

The report found that:

• Litigation financing allows those who are unable or unwilling to fund their own legal costs to have access to justice. Litigation funders choose only between 3 and 5% of possible cases. This means that it is not possible to offer this as a mainstream way to access justice.
• While litigation funding allows claimants to have their day in court once they are able to get their money back, compensation may not be enough for the damage suffered. This is particularly true if there are rectification expenses. When used, litigation financing does allow for litigation that would not have been possible to fund otherwise. For Litigation Funding, visit https://www.novo-modo.co.uk/litigation-funding
• In many cases, litigation funding is used to fund issues that affect a large portion of the population. These cases can include those involving broader consumer concerns. They can influence the consumer market, as well as the development and enforcement rule of law.