Although litigation is fairly common in the UK, it continues to be plagued by myths and misconceptions that can hinder clients from getting litigation funding.
Funders Aren’t Interested in This Area
There can be a perception, even among lawyers, that litigation funding is limited only to a few specific areas such as large-scale group actions. However, it is worth looking around. Funding will often be available if the firm thinks there is a good chance of success. An option you can also consider is a litigation funding specialist such as https://www.novo-modo to help place your case.
The Ratio of Costs to Damages Must Be at Least 1:10
When assessing cases, there will be an estimated budget and expectation of the damages, but it is untrue to say that this is fixed or that the ratio is 1:10. Many litigation funders will take a more holistic view, considering many factors in their decisions.
Some
There was once some truth to this, as when the litigation funding market began, most were only interested in funding amounts of over £1 million. But this is no longer the case. Today there can be funding for cases starting at just a few thousand pounds, as long as the case is economic.
No Funding for Clients That Can Self-Fund
Funding is available for clients that can afford to self-fund, and many prefer to do this. This is particularly the case with many SMEs, who may technically be able to afford the case but would prefer to have money to grow their business. Third party funding can also improve the relationship between the SME client and the legal firm when litigation takes longer than expected.
Not Needed When Firms Share the Risk
While it is true that some firms will agree to share the risk and even charge only if the case won, this does not negate the need for litigation funding. There are still some costs the client will need to fund, such as court fees. Litigation funding can also ease the burden of the firm.