The litigation funding market is still relatively new in the UK, however there are signs that it is becoming more and more commonplace.
The increasing costs of litigation and the improvements in litigation funding options are just a couple of factors that have contributed to the growth of this market. That, along with investors keeping a keen eye on the market for new investment opportunities, can only mean a bright, strong future for our litigation market in the UK.
How is the market changing?
The market is moving on from the large commercial litigation funding companies that currently take over. Newly devised funding packages on offer from those already involved in the market are changing the game.
There are lots of new litigation funders joining the market too. This means that diversity is required which has come about with firms now targeting smaller value cases, from £50,00 to £100,000.
There are also funders looking into the prospect of class action claims as well as private litigation cases involving wealthy individuals. Lets not forget that litigation funding may also be available to finance divorce proceedings, another area of the market for funders to consider.
Why invest in Litigation Funding?
Litigation funding, or third party litigation funding, eliminates the need for the claimants to pay costly, monthly lawyers fees which protects the cash flow of their businesses. The awareness of the availability of such funding has made lawyers very aware that they need to respond to these market forces by offering the right funding products. The volume of claims being put forward for funding has rapidly increased as a result of this change, and looks likely to continue.
Investors wishing to diversify their portfolio accept litigation funding as a sound alternative to asset investment. Pros seriously out way the cons with this investment type. The market is full of reputable funders with established and proven results of above average return. Demand also outweighs supply, and this type of asset is not really affected by economic change.
That explains why the litigation market has attracted hundreds of millions of pounds from investors, making the UK litigation market one of the biggest in the world.
Is the evolving litigation funding market an investment type your company may consider? Share your thoughts with us in the comments?