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Financement de litiges

Fournir à nos clients des outils essentiels pour la résolution des litiges

Dispute finance has become an essential tool in the litigation resolution toolkit and in recent years has become increasingly commonplace in dispute resolution.

Dispute finance offers a solution for those who cannot pursue strong claims due to the associated costs and perceived risks, and/or offers a solution to those who want and choose to take the cost of the dispute(s) off balance sheet.

Dispute finance provides the ability to transfer risk, release resources back to the business, realise revenue from claims and to avoid the adverse accounting impacts from ongoing dispute expenditure.

We have good working relationships with all the leading funders, working with our clients to find the best solution in each case.

Clyde & Co has formed a relationship with Litigation Capital Management Limited (LCM), a leading international provider of dispute financing solutions, to finance disputes undertaken by our clients.

LCM has made available a multi-million pound fund to provide funding for cases for our clients. This funding facility is available for qualified clients and can be utilised for litigation and arbitration spend, subject to satisfactory completion of external due diligence. LCM makes the final decision on the investment and terms for each investment are tailored and specific to each client and situation.

The benefits for our clients include:

  • Reduced financial risk
  • Preservation of cash for operating activities, rather than dispute resolution
  • Provision of adverse cost indemnities
  • Dispute costs are removed from the P&L and balance sheet “drag” is eliminated
  • Funding is non-recourse

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How dispute finance works

Dispute finance, or third party funding, is the process whereby a ‘funder’, which has no direct interest in a piece of litigation, pays the legal costs for one of the parties.

In return, the funder receives a return on their investment which is conditional on the success of the case and is paid out of the proceeds of the action.

It is usual for that return to be a multiple of the amount that was advanced, or a percentage of the proceeds, or some agreed combination of both. The amount of any return will reflect the risk involved, the amount of capital invested and the length of time the investment is at risk.

Portfolios

Traditionally, funders have financed single, isolated claims. Funding of a single claim carries a high degree of risk for the funder because if that claim is unsuccessful the funder will not recover its investment.

Multiple claims can be packaged into a portfolio and the financial risk for the funder is diversified across the book resulting in lower capital risk and therefore a lower return charged by the funder.

  • A portfolio typically consists of a minimum of three claims
  • The funding costs for a portfolio are lower due to the decreased risk profile relative to a single case
  • Cases may be added into a portfolio over time and the funding facility can be adjusted accordingly. A framework agreement can be created with just one case
  • A portfolio can comprise different types of cases and include low value claims as well as defence cases

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Sapna Jhangiani
Sapna Jhangiani

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Ben Knowles
Ben Knowles

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Maurice Thompson
Maurice Thompson

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