What is Disputes Finance?

Disputes finance originated in Australia in the late 1990s, with LCM being one of the first companies operating in the industry.

Disputes finance, also known as litigation funding or third-party funding, is essentially a finance product whereby a funder assumes some or all of the financial risk of a legal claim in exchange for a share of the amount recovered from that proceeding.

Ordinarily, our disputes finance products see LCM agreeing to bear some or all of a claimant’s legal costs, which can include solicitor’s fees, barrister’s fees, independent experts, and court or arbitral fees. LCM can also provide an indemnity to cover any adverse cost exposure that the claimant may face in the event of an unsuccessful outcome.

In return for LCM’s investment, and only if there is a successful result from the claim, LCM will receive repayment of the costs it has funded, plus a funding premium. Such funding premiums are always agreed with the claimant at the outset and are commonly measured as a multiple of funded costs, a percentage of the recovered amount, or a combination of both.

Importantly, disputes finance provided by LCM is ‘non-recourse’ to the claimant’s assets, meaning LCM will only recover its funded costs and funding premium if the claim is successful. If the claim is unsuccessful, LCM has no right to be repaid its investment.

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