Litigation Financing – A Conceptual Framework

Authors

  • Collins Ngwakwe University of Limpopo

Keywords:

Litigation finance; legal costs; litigation investment; claim assets; risks and return

Abstract

Financial costs, which accompany the pursuit of legal redress is documented in the literature as one of the impediments, which deter litigants from seeking their legal rights, redress, or remedies. However, this domain of discussion, which pervades finance and law, is not very common in research literature. Objective: Accordingly, this paper aims to provide a conceptual understanding on the concept of litigation financing and a framework therefrom. Prior work: the paper relies on prior literature theorisations of litigation financing. Approach: The approach is conceptual with reliance on critical review of extant authoritative research discussions and culminates in a brief conceptual framework for further research on litigation finance. Findings: litigation financing is emerging in the investment arena and in legal practice. It holds potential for rewarding financial returns to investors (funders) if the risks are minimized. Implication: it offers practical, theoretical, and academic implications for legal policy makers, attorney firms, litigation investors (funders), and scholars of finance and law in business schools and law faculties. Value: it conceptualises litigation financing by adopting an interdisciplinary stance – crisscrossing the law and finance and development a novel conceptual framework of litigation financing for further research.

References

Abramowicz, M. (2013). Litigation finance and the problem of frivolous litigation. DePaul Law Review 63, 195,https://heinonline.org/HOL/LandingPage?handle=hein.journals/deplr63&div=12&id=&page=

Bedi, S., & Marra, W. C. (2021). The Shadows of Litigation Finance. Vanderbilt Law Review, 74, 563 – 620

Bedi, S., & Marra, W. C. (2021). The Shadows of Litigation Finance. Vanderbilt Law Review,https://scholarship.law.vanderbilt.edu/vlr/vol74/iss3/6

FindanAttorney (2022) Attorney Contingency Fees,https://www.findanattorney.co.za/content_attorney-contingency-fees#:~:text=The%20contingency%20fee%20will%20usually,clients%20to%20charge%20contingency%20fees

Flynn, G. S. (2013). The Tempting Contingent Fee Case. Litigation ,https://heinonline.org/HOL/LandingPage?handle=hein.journals/laba40&div=30&id=&page=

GoLegal (2022) Litigation funding: Pioneering an alternative asset class in South Africa,https://www.golegal.co.za/litigation-funding-asset-class/

Juneja, P (2022). Litigation Funding: A Primer (Management Study Guide). Retrieved from,https://www.managementstudyguide.com/litigation-funding-a-primer.htm, date: 06.18.2022

Kuper, S (2019) The history of litigation funding. https://www.golegal.co.za/litigation-funding-history/

LII (Legal Information Institute) (2022) remedies: an overview. Retrieved from,https://www.law.cornell.edu/wex/remedy#:~:text=A%20remedy%20is%20a%20form,from%20a%20successful%20civil%20lawsuit, date: 06.18.2022

MSG (2021) Litigation Funding: A Primer,https://www.managementstudyguide.com/litigation-funding-a-primer.htm

Pierce, J., Burnett, D, Urquhart, Q. E & Sullivan LLP (2013) The Emerging Market for Litigation Funding, The Hedge Fund Journal,https://thehedgefundjournal.com/the-emerging-market-for-litigation-funding/

Retrieved from,https://s3-eu-west-2.amazonaws.com/lawcom-prod-storage-11jsxou24uy7q/uploads/2016/08/No.121-Privity-of-Contract-Contracts-for-the-Benefit-of-Third-Parties.pdf, date: 06.18.2022

Rodak, M. (2006). It's about Time: A System Thinking Analysis of the Litigation Finance Industry and Its Effect on Settlement. University of Pennsylvania Law Review,https://scholarship.law.upenn.edu/penn_law_review/vol155/iss2/4

Shepherd, J. M., & Stone, J. E. (2015). Economic conundrums in search of a solution: The functions of third-party litigation fiance. Arizona State Law Journal,https://arizonastatelawjournal.org/wp-content/uploads/2015/12/Shepherd_Final.pdf

Steinitz, M., & Field, A. C. (2013). A model litigation finance contract. Iowa Law Review, 99, 711.

The Law Commission (1991). Privity of Contract: Contracts for the Benefit of Third Parties.

Thomson Reuters (2022). Privity of contract. Retrieved from,https://uk.practicallaw.thomsonreuters.com/8-107-7056?transitionType=Default&contextData=(sc.Default)&firstPage=true, date: 06.18.2022

Downloads

Published

2022-08-31

Issue

Section

Studies and Articles