Litigation Funding: The Importance of “Both Sides of the Story”

Most litigation funding applicants naturally tend to focus on the merits of their case when talking to funders.  After all, anyone motivated to initiate a lawsuit likely believes that their case is extremely strong.  Application packages tend to focus on the plaintiff’s allegations against the defendant, and documents meant to prove those allegations.

The problem with litigation is that there are always other sides of the story. 

It is easy for a plaintiff to tell the story in a way that puts all blame for the dispute on the defendant and none of the blame on the plaintiff.  Any decently skilled attorney will artfully draft pleadings so they are focused exclusively on why plaintiffs should win.  In other words, having a strong one-sided story is the minimum requirement for successful litigation.

But when the defendant intends to put up a big enough fight that the plaintiff requires litigation funding, that generally means the defendant has their own story to tell and they believe the story is strong enough to win in front of a jury.  No litigation funding application can be properly evaluated for the likelihood of success without at least some sense of what defenses and counterclaims the defendant will advance.  If the applicant has nothing in writing to indicate what those defenses will be, it is probably too early to approve funding.

When has the defendant adequately disclosed all defenses to allow for proper risk evaluation?  That often depends on the jurisdiction and the past dealings between the plaintiff and defendant.  Some examples include:

• Answers to complaints, if the jurisdiction requires substantive responses to complaint allegations (as opposed to generalized denials);
• Initial disclosures, if the jurisdiction requires substantive disclosure in that document
• Dispositive motions, such as motions to dismiss or motions for summary judgment
• Demand letters, which are often exchanged before litigation commences
• Mediation memos, when exchanged by the parties

Providing documents showing the defenses and counterclaims that the defendant will probably raise is the best way to accelerate approval of your litigation funding.

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Whether you are a solo attorney, a large international firm, or somewhere in between, Pravati Capital can help alleviate financial stress. Call us at 844-772-8284 or complete our online contact form now to learn more. Pravati Capital is a partner to law firms, providing the flexibility for contingency fee arrangements, marketing, or litigation expenses. Together, we help your firm leverage its case portfolio’s underlying value and turn potential into profits.