July 31, 2017
Third-party litigation funding is emerging as an option for companies to ease their legal spend, according to an article in Law Times. In her article, author Judy van Rhijn examines how litigation funding is being seen as a vehicle for profit and investment firms are showing interest. Karin Sachar, an associate in Osler’s Litigation Practice Group, explains.
“More lawyers are talking about third-party financing as a potential option and not just for class action plaintiffs and individual personal injury cases,” Karin tells Law Times. “Historically, that has been the sweet spot.
“Now, it has become more of an option in commercial matters. Commercial litigators are open to new and innovative solutions for clients.”
Karin also says that managing financial risk associated with litigation is a key consideration.
“When deciding whether to start litigation, it may be helpful to box some of the unknowns by leveraging third-party funding,” she tells Law Times.
“Large commercial clients represent a higher risk in terms of funding. They require a bigger investment, but there is the potential for a bigger return.”
Public companies have to report litigation costs on their balance sheets, so in-house counsel may want to take the risk off their books in some cases with third-party funding, according to Karin.
“They have a claim plus an adverse risk,” Karin says. “They transfer the risk to a third party, allowing the litigation department to frame itself as an asset, not a cost centre.”
For more information, read Judy van Rhijn’s article “Focus: Companies use third-party litigation funding” in Law Times.