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Preparing an application for funding

By Katie Armstrong

Due to the growing awareness of litigation funding options, an increasing amount of plaintiffs and lawyers now have access to capital to litigate valid claims and grow their firms. However, for many plaintiffs and lawyers, the funding process is new and opaque. Furthermore, the skills required to successfully secure funding are typically outside of lawyers’ teachings.

Each funder will have a slightly different decision-making process, nonetheless, each is interested in the same type of information. Therefore, a plaintiff or lawyer seeking funding – or similarly in terms of application process, insurance – can profit from the following principles in preparing a case for market.

Adhere to best practices

Best practice dictates that plaintiffs/lawyers enter into an NDA/Common Interest Agreement with each potential funder prior to sharing any documentation. Since each prospective funder will have a different due diligence process and require time and effort to work with, it is helpful to perform some basic due diligence on the funder. Understanding the size of investment capabilities, capital available and even asking for references from prior clients are simple steps to ensure that you are dealing with a suitable fit for your matter.

Make it easy on the funder

Funders are inundated with funding proposals, and the choice of where to spend their time is often dictated by the amount of effort required to understand the basics of the case. Simply emailing over the entire docket is rarely effective; instead, a concise overview of the case providing all the basic details of the matter is essential to launch the funding process effectively. TheJudge helps present the case bundle in the format expected, although content matters as much as the format. Information that should be contained in this introductory overview includes an overview of the facts including case-type, funding sought, potential damages, venue, stage of proceedings and fee arrangements. The best overviews anticipate potential sticking points in the case and address these issues head-on.

Understand and drive the process

As mentioned, each funder will have a different process for assessing a case for funding. Those seeking funding should ask about this process in detail and set deadlines for each step in the process. Furthermore, plaintiffs and lawyers should actively push the potential funder to provide all due diligence requests in bulk rather than engaging in piecemeal requests.

The funding process remains non-standard and, depending on the particular funder, the timelines can be lengthy. By adhering to the principles above a plaintiff/lawyer can increase the chances of securing funding in a timely and (insofar as is possible) stress-free manner.

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