Over the years our clients have asked us a number of questions about dispute resolution funding. We have answered the most common of these below, but if you do not see an answer to your question, please do contact us and we will do our best to help.
The term dispute resolution funding covers both litigation funding and arbitration funding and is sometimes referred to as third-party funding or, in the United States, legal financing.
Dispute resolution funding for claimants is a simple financing tool. A third-party funder agrees to pay for a claimant’s legal fees (usually including experts, outside counsel and disbursements) in accordance with a pre-agreed budget.
If the claim is successful and depending upon what has been agreed between the funder and the claimant, the funder will be entitled to either a multiple of the money invested in the case or a percentage of the damages.
If the claim is unsuccessful, the claimant will pay nothing and the funder loses the money invested in a case.
In this typical scenario, funding is provided on a non-recourse basis, allowing a claimant to take the risk of litigation or arbitration off its balance sheet.
For law firms
Law firms looking to manage their litigation and arbitration risks, including managing exposure to conditional fee arrangements (CFAs) and damages based agreements (DBAs), can benefit from working with an experienced third party funder.
Arrangements are customised to the needs of the individual law firm, taking into account their risk appetite, existing arrangements with clients, and the number, size and underlying characteristics of the cases to be funded.
Yes. We have written a brief overview of the history of litigation funding on our blog.
Commercial disputes. We do not fund consumer or personal injury cases.
Yes. Our team has the expertise and experience to fund cases on a global basis and has funded cases in the courts of Australia, Cayman, Dubai, the UK and the USA and in most recognised international seats of arbitration.
Yes. Increasingly arbitration is the preferred mechanism for resolving high-value international commercial disputes. Our team includes former arbitration lawyers from the world’s top law firms.
We have a minimum claim size of £3,000,000 ( or local currency equivalent ) with no upper limit. However, in exceptional circumstances (for example, when there are very high prospects of success or a high damages to costs ratio) we will consider smaller cases.
Yes. We are flexible and can part fund cases.
No. Our review process is entirely at our own cost.
As a general rule, sooner rather than later. Usually the best time is when you have instructed lawyers and have a good initial view of the merits of the case. However, we are happy to have an initial conversation at an earlier stage if it is helpful.
No. We welcome direct approaches from claimants and, if you need to find a law firm or counsel to act for you, we have a strong network of contacts and can make introductions.
No. One of the benefits of using third party funding is that you can retain your first choice law firm and counsel who are able to charge out at their usual rates.
Our priority is ensuring that the confidentiality of your information is maintained and that it is stored securely. This means uploading it to VCMS, our bespoke case management system, which uses 128 bit SSL encryption and sits on our own secure virtual private network.
Once on VCMS, we will carry out an initial review and give you an initial indication of whether the case fits our criteria within 14 days and start our full review process.
At the outset we will ensure that the parties enter into a Common Interest and Confidentiality Agreement.
This will depend on the information we are provided with and the complexity of the case, but our review process has been designed to be efficient and effective so that we can deliver timely decisions. On average we would expect a claim to take 30 to 60 days from receipt of case documentation through to signing the funding agreement. One advantage we have over other funders is we do not have prescriptive investment committee timetables whereby the committee is only able to meet once a month.
No, Vannin Capital has funds immediately available.
No, your case will be run in the same way it would have been if it wasn’t funded. You will retain control of all key decision making and can continue to use your first choice of law firm and counsel.
No. Our ongoing case monitoring is always professional and proportionate, carried out by lawyers with demonstrable domain expertise and aims to add value to the case. We will work as a collaborative, trusted partner with your disputes team.
Only in very limited circumstances prescribed by the Association of Litigation Funders (ALF) under their Code of Conduct which states that a funder may only pull out of a litigation funding agreement if they:
In addition, the ALF Code of Conduct does not permit a discretionary right for the funder to terminate a LFA in the absence of the circumstances described above.
The ALF Code of Conduct provides that where there is a dispute about termination or settlement, a binding opinion must be obtained from an independent QC, who has been either instructed jointly or appointed by the Bar Council. Further, The ALF has a detailed complaints procedure by which all members agree to be bound.
Bills will be paid in accordance with the pre-agreed budget which forms an integral part of the funding agreement. One key advantage to law firms on a funded case is that their bills are underwritten by Vannin Capital.
Yes. We will consider cases when costs have already been incurred provided that it meets our other criteria; namely, that the case has good prospects of success and a minimum quantum of damages of £3,000,000.
Yes. A claimant will need to take out insurance to cover adverse costs exposure.
Yes. In fact, we can offer very competitive ATE insurance as an integral part of a litigation funding agreement. This avoids the need for a separate time consuming and costly due diligence process with an insurer.
This will depend on what has been agreed between the parties, but, in principle, we will be entitled to either a multiple of the money we invested in the case or a percentage of the damages recovered (whichever is greater).
Assuming that the case was fully funded, the claimant pays nothing and we lose all the money we invested in the case.