Third-Party Litigation Funding Disputes

Third-Party Litigation Funding Disputes

Third-Party Litigation Funding refers to the financial support provided by a third-party entity to a plaintiff in a legal case, typically in exchange for a portion of any settlement or judgment awarded. This funding allows plaintiffs who may not have the financial resources to pursue a lawsuit to proceed with their claims.

Disputes in this context arise when there are disagreements between the plaintiff, the third-party funder, and potentially the defendant regarding the terms of the funding agreement, the distribution of any financial recovery, or the management of the litigation itself.

For example, a plaintiff may enter into an agreement with a funding company to receive $100,000 to cover legal fees and expenses in exchange for 30% of any settlement received. If the case is successful and a $1 million settlement is reached, the funder would expect to receive $300,000. However, disputes may occur if the plaintiff believes that the funder is entitled to a larger percentage than initially agreed upon, or if there are disagreements on how the expenses should be calculated.

These disputes can complicate the litigation process and may necessitate additional legal proceedings to resolve the issues between the parties involved.

Such disputes highlight the complexities of Third-Party Litigation Funding, including the importance of clear contractual terms and the potential consequences of litigation financing on the overall legal strategy. As this funding model continues to grow in popularity, understanding the nature of these disputes is crucial for all parties involved in the litigation process.