In a perfect world access to justice would be a fundamental right- not a privilege of the rich. However, in practice the right of access to or defence against a legal claim frequently depends upon this factor: money. Expensive litigation, lengthy court procedures and the fear of losing may even discourage the most qualified plaintiffs to pursue their day in court. That is where litigation finance can be used, not only as a financial instrument, but also in order to ensure that one of the core values is observed: justice should not be a luxury.
The Economic Barrier to Justice
The law is intended to provide a fair way of resolving disputes but when one party has an ability to play the long game and the other does not fairness is lost.
- The small business owner may not be able to finance multi-year litigation against a multinational corporation, especially when the business owner has a viable breach of contract claim.
- A worker who has to deal with discrimination in the workplace might feel reluctant to sue because she/he is not able to afford the court battle.
- Even corporate complainants, especially IP/commercial actions, can dispense with litigation because their legal budgets are strained.
These are not single problems. They are the side effect of a justice system in which money usually trumps merit.
Litigation Finance: Leveling the Playing Field
Litigation finance or legal funding or third-party funding provides a solution. Under this structure, a third-party financier will pay part or all of the expenses of litigation ( attorney fees, court costs, expert witness fees, etc.) in anticipation of receiving a portion of the recovery, in the event of an award.
In case of a lost case the funder bears the loss. This non-recourse provides the plaintiff with the financial risk free environment to continue with a case which they would have dropped.
How It Works
The process is straightforward:
- Case Evaluation – Funders conduct due diligence to assess the legal merits and potential value of the case.
- Funding Agreement – Once approved, the plaintiff receives capital to cover litigation-related expenses.
- No Win, No Repayment – If the case succeeds, the funder receives a pre-agreed portion of the award. If it fails, the plaintiff owes nothing.
This model incentivizes only strong, meritorious cases — ensuring litigation finance doesn’t encourage frivolous lawsuits.
Driving Justice Across Sectors
Litigation finance has become a game-changer across multiple areas:
- Commercial Litigation: SMEs and startups can pursue complex claims without draining operating capital.
- Class Actions: Funding enables consumer and mass tort claims that hold powerful corporations accountable.
- Intellectual Property: Innovators and inventors can defend their patents against infringement by deep-pocketed competitors.
- Employment & Whistleblower Claims: Individuals can challenge corporate misconduct without facing financial ruin.
By removing the economic roadblocks to litigation, legal funding opens the courtroom to those who previously had no path forward.
Addressing the Concerns
Critics also claim that litigation finance may disrupt the legal strategy or that litigation finance will result in a conflict of interest. Nevertheless, ethical rules are maturing fast, contractual transparency is getting better every year and the industry is being regulated.
It is not to substitute legal representation or to dominate litigation -but to enable clients to have access to the resources necessary to exercise their rights.
The Bigger Picture
During the era when the people lose their trust in the judicial systems, litigation finance restores their faith. It allows people and organizations to fight the injustice, regardless of how much money they have in their bank account.
It also conveys a wider message: that access to the law is not limited to the few- but to everyone.
Conclusion
Justice is not supposed to be a luxury it is a right. Litigation finance does not only finance lawsuits, it finances justice. It gives individuals the power to push back, to be heard and to prevail, not on the basis of their resources, but by the merits of their case.
With litigation finance expanding, the practice could come to transform the legal scene not in terms of how much justice can be profitable, but rather how much justice can be possible.
