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£16m Settlement Reached in Dispute Between Funder and Investor’s Estate

By Harry Moran and 4 others |

The funding of arbitration claims brought against nation states represent challenging opportunities for legal funders, with the potential of a large return balanced against the complicated nature and prolonged timelines of these disputes. A new settlement in the High Court demonstrates that these issues can even extend to disputes between the claimant and funder, even when a valuable settlement is secured.

Reporting by the USA Herald covers the move by the High Court of Justice of England and Wales to finalise the settlement in a dispute between litigation funder Buttonwood Legal Capital, and the estate of late Finnish mining investor Mohamed Abdel Raouf Bahgat. The £16.74 million settlement which was approved by the court on Tuesday ended the legal action that Buttonwood began in 2022 to recover a share of the award won in Bahgat’s arbitration case against Egypt.

As Mr Bahgat died on 8 October 2022, the settlement was reached with his estate. The arbitration claim dated back to 2000 when Bahgat was arrested by the new government and had his assets frozen and his mining operations project seized. The arbitration ended in 2019 at a tribunal in The Hague where Bahgat was awarded $43.8 million, which following two years of interest and an enforcement dispute, finished as a $99.5 million payout in November 2021. Buttonwood brought a claim to the High Court in the following year to retrieve its share of the amount, further complicated by a prior renegotiation of terms between Buttonwood and Bahgat in 2017.

Neither Buttonwood Legal nor the Estate of Mr Bahgat have publicly commented on the settlement.

LSB Director Argues Funding Should Move to a “Mandatory Model” of Regulation

By Harry Moran and 4 others |

With next Monday set as the deadline for the Civil Justice Council’s (CJC) Interim Report and Consultation on litigation funding, we are beginning to hear more vocal arguments about the approach the government should take towards regulating the litigation funding industry.

An article in Legal Futures provides an overview of remarks given by Richard Orpin, Director, Regulation & Policy at Legal Services Board, at a consultation event for the CJC review in Oxford. In his speech, Orpin advocated for “moving away from the voluntary model of regulation to a mandatory model” for litigation funding, suggesting that it should be brought “into the remit of the FCA (Financial Conduct Authority).

Orpin argued that the rise in the use of litigation funding had “coincided with an increase in poor practice by some law firms in receipt of that funding,” and that “this pattern of behaviour undermines trust confidence in the ‘no win, no fee’ sector.” Orpin put forward the view that regulators needed to take a “more proactive” stance, highlighting his organisation’s concerns over “poor standards of client care, short-term financial gain being put above the interests of client and duty to the court.”

Other speakers at the event varied in their perspectives, with Richard Blann, head of litigation and conduct investigations at Lloyds Banking Group, similarly arguing that the current model of self-regulation was “ineffective and inadequate” and that the Association of Litigation Funders (ALF) “has no teeth”. 

Adrian Chopin, managing director and founder of Bench Walk Advisers, offered a dissenting view and questioned some of the preconceptions about funding, saying that the suggestion there are “waterfalls where the funders take everything and the client gets nothing” demonstrated a “gross level of ignorance”.

Community Spotlights

Community Spotlight:  Maz Ghorban, President, Rockpoint Legal Funding

By John Freund and 4 others |

As President of Rockpoint Legal Funding, Maz Ghorban brings over 25 years of leadership experience spanning the legal services, call center, and software industries. With a proven track record of scaling private and public companies, Maz drives Rockpoint’s mission to empower plaintiffs by providing critical funding, accessible medical treatment, and operational efficiencies for law firms.

Based in Los Angeles, Maz oversees Rockpoint’s innovative offerings, which include pre-settlement and post-settlement funding, plaintiff and litigation funding, and medical lien purchases. He is also leading the launch of Rockpoint Probate Funding, a groundbreaking initiative aimed at providing financial relief to beneficiaries and executors navigating the complex probate process. This service enables heirs to access funds for urgent expenses such as medical bills, funeral costs, and daily living needs, bridging the gap during inheritance delays.

Before joining Rockpoint, Maz served as Executive Vice President and Business Unit CEO at Alert Communications, where he enhanced operational efficiencies for law firms nationwide by leading the largest legal-only intake call center in the United States. Prior to that, he was Vice President of Global Services at AbacusNext (now Caret), a premier provider of practice management solutions for law and accounting firms. His leadership roles also include serving as Vice President of Corporate Strategy and M&A at OnSolve, a leader in emergency mass notification solutions.

Earlier in his career, Maz held senior management roles at West Corporation and Raindance, where he focused on post-sale operations and corporate strategy. As Senior Vice President of Corporate Strategy at MIR3, he spearheaded mergers and acquisitions, including the successful sale of the company to Veritas Capital. With a comprehensive understanding of the legal services lifecycle, Maz has dedicated two decades to supporting plaintiff and defense firms with case acquisition, case management, IT/technology solutions, and firm operations.

A recognized thought leader in the legal and financial services industries, Maz frequently shares his expertise on topics such as litigation funding, corporate strategy, and operational excellence. Outside of his professional endeavors, Maz is a passionate Pittsburgh Steelers fan who enjoys teaching boxing, playing musical instruments, and spending quality time with his family.

Under Maz’s leadership, Rockpoint Legal Funding continues to set industry benchmarks for innovation, excellence, and client satisfaction. His strategic vision and unwavering commitment position the company as a trusted partner for plaintiffs, law firms, and beneficiaries seeking comprehensive financial solutions in the legal sector.

Company Name and Description:  Rockpoint Legal Funding provides tailored financial solutions for plaintiffs and law firms, offering critical funding to individuals involved in litigation, including personal injury and employment cases. By bridging financial gaps during the legal process, Rockpoint empowers plaintiffs to access necessary medical care and living expenses while helping law firms streamline operations and maximize case outcomes.

Company Website: https://rockpointlegalfunding.com/

Year Founded: 2015

Headquarters:  Serving clients across the United States, with a strong presence and specialized focus in California.

Area of Focus: When individuals face financial challenges during the litigation process, Rockpoint Legal Funding provides essential solutions to bridge the gap. By offering pre-settlement and post-settlement funding, as well as medical lien purchasing, Rockpoint enables plaintiffs to access necessary medical care and cover living expenses without the financial strain.

Law firms also benefit from Rockpoint’s tailored funding solutions, which streamline operations and improve case outcomes. With a commitment to empowering plaintiffs and supporting legal professionals, Rockpoint Legal Funding plays a vital role in facilitating access to justice while driving efficiency and innovation in the legal funding industry.

Rockpoint continues to expand its impact through initiatives like Rockpoint Probate Funding, addressing financial needs during the complex probate process. For more information, visit Rockpoint Legal Funding.

Member Quote: "Don’t count the days, make the days count." - Muhammad Ali

Arizona Senate Committee Approves Litigation Funding Disclosure Bill

By Harry Moran and 4 others |

The fight over the future of regulation for third-party litigation funding continues to see a plethora of activity at the state level in the U.S., as last week a bill in the Arizona legislature moved one step closer to becoming law and imposing new restrictions on legal funding.

Reporting by Chamber Business News covers the move by the Arizona Senate’s Regulatory Affairs & Government Efficiency Committee to approve a bill governing transparency in litigation funding in the state. Senate Bill 1215 passed the committee with a majority vote, with four members voting for its advancement, two votes against and one ‘not voting’. 

The bill, which was sponsored by Senator Vince Leach, shares similarities with similar legislation put forward in other states by introducing new rules governing the disclosure of third-party funding in civil claims. The bill requires the disclosure of litigation funding agreements to all parties in the action, prohibits the funder from receiving a larger share of the proceeds than the claimants, and restricts the influence a funder may have on litigation decisions including choosing counsel, expert witnesses or the direction of litigation strategy.

The bill is supported by the Arizona Chamber of Commerce & Industry, the Arizona Manufacturers Council, the Arizona Lodging & Tourism Association, and the Arizona Trucking Association. Organisations opposing the bill include the Arizona Trial Lawyers Association and the International Legal Finance Association.

The full text of SB 1215, as well as information on the passage of the bill, can be found on the LegiScan website.

Legal Professionals Offer Differing Views on the CAT’s Approval of £200m Mastercard Settlement

By Harry Moran and 4 others |

As LFJ reported earlier this week, the news that the Competition Appeal Tribunal (CAT) had approved the £200 million settlement for the Mastercard class action provided a landmark ruling that will no doubt be seen as an important moment for legal funding in 2025.

An article in The Global Legal Post reflects on the impact of the CAT ruling, garnering views from senior professionals across the legal industry as to the merits of the tribunal’s decision and the impact it may have on similar cases moving forward.

Leslie Perrin, chair of Calunius Capital and former chairman of the Association of Litigation Funders, provided the funder’s perspective and said that “there has to be hope that Merricks’ settlement with Mastercard is not a blueprint for other cases”. Perrin also expressed concern that the CAT’s decision “will no doubt encourage other defendants”, and lamented that “the funder’s intervention to challenge the settlement has been unjustly criticised”.

Charles Balmain, partner at White & Case, noted that the speed with which the CAT approved the settlement “suggests that the tribunal had no hesitation in concluding that the settlement struck was just and reasonable.” Furthermore, Balmain highlighted that this decision serves as a useful reminder as to the gulf between the “eye-watering” value of claims put forward when they are first brought and the “the true value” that is returned at the end of these prolonged proceedings.

Louise Trayhurn, co-founder of Crescient, a corporate advisory boutique that specialises in litigation risk, also highlighted the extended duration of such cases and argued that it is “a shame for the parties and courts (but not the lawyers) that it cost almost £90m to get that result”. Trayhurn also placed this case in the wider context of the legal funding market that supports these claims, explaining that “funders are vital in bringing these cases and holding corporate behaviour to account, but they have limited ability to affect settlement”.

Woodsford Funding Australian Class Action Targeting Tesla

By Harry Moran and 4 others |

Although Elon Musk’s name has become most prominent in stories about U.S. politics over recent months, in Australia, it Tesla that has attracted the attention of a new lawsuit alleging that it has marketed and sold vehicles that are defective.

An article in ICLG covers the launch of a new class action being brought against Tesla over allegations that the car manufacturer’s semi-autonomous driving system has put drivers at risk through its ‘phantom breaking’ phenomenon. Furthermore, the class action is targeting Tesla’s marketing of its vehicles, alleging that the company has mislead customers over the supposed range of its vehicles. The class action was filed by JGA Saddler and is being funded by Woodsford.

Rebecca Jancauskas, director of JGA Saddler, took aim at Tesla’s “so-called Autopilot” feature, arguing that the vehicles’ habit of applying the brakes at random “could, if it causes an accident, result in serious injury and/or death.” Jancauskas also painted the alleged false advertising of Tesla vehicles’ range as part of a wider picture of misleading behaviour from the car company, saying that she “hoped this claim underscores the importance for all EV manufacturers to be truthful in their marketing, deliver on their promises, and ensure their products are safe and reliable.”

David Haughan, investment officer at Woodsford, argued that Australian consumers who purchased Tesla vehicles “were sold a car based on promises about the vehicles’ self-driving capabilities, battery range, and safety features, and Tesla has not delivered.” Haughan stated the primary motivation behind the class action in plain terms: “Tesla customers have not got what they paid for.”

More information about the Tesla Motors Class Action can be found here.

An LFJ Conversation with Obaid Saeed Bin Mes’har, Managing Director of WinJustice

WinJustice is the first litigation funding firm in the UAE, empowering businesses and individuals to access justice without financial strain. The UAE’s unique legal landscape, divided into onshore and offshore jurisdictions, offers a dynamic environment for litigation funding. As a trailblazer in this space, WinJustice is committed to making justice accessible and affordable for all. Below is our LFJ Conversation with Obaid Saeed Bin Mes'har: 1. The UAE has been expanding its legal landscape in recent years. How has the growth of the legal industry in the UAE impacted the demand for litigation funding?

I personally believe and during my professional experience I have seen that the UAE’s legal sector has experienced significant expansion, driven by economic growth, international investments, and regulatory advancements. This transformation has directly influenced the demand for litigation funding, as businesses and individuals seek financial support to navigate complex legal disputes without upfront costs.

Let me explain, what are few major factors driving demand in UAE market:

Increase in Commercial Disputes:

  • With the UAE’s rise as a global business hub, contract disputes have surged, particularly in high-stakes sectors like construction, real estate, and finance.
  • The growing reliance on arbitration and cross-border transactions has made litigation funding a strategic necessity

Dual Legal Framework:

    • The UAE’s unique system—onshore civil law courts and offshore common law jurisdictions (DIFC, ADGM)—creates a dynamic environment for litigation funding.
    • Offshore jurisdictions provide clear regulatory frameworks for third-party funding, increasing confidence among investors and litigants.
Escalating Legal Costs:
    • High litigation and arbitration costs often deter claimants from pursuing valid cases.
    • Litigation funding ensures businesses and individuals can seek justice without financial constraints, shifting the cost burden to funders.
Regulatory Support & Market Maturity:
    • The DIFC’s Practice Direction No. 2 of 2017 and ADGM’s Funding Rules 2019 have legitimized litigation funding, fostering investor confidence.
    • This has encouraged global litigation funders to enter the UAE market, increasing competition and accessibility.
Greater Awareness & Adoption:

At WinJustice, we are committed to spreading awareness and advancing the adoption of litigation funding across the MENA region. Our commitment is reflected in various initiatives, including education, thought leadership, and industry awareness.

As part of this mission, we are excited to announce the launch of our LinkedIn newsletter, "Litigation Funding MENA Insight"—the first dedicated newsletter in the region focusing on litigation funding. This initiative is particularly significant as it is led by a UAE-based company, bringing deep regional expertise and global perspectives.

Our newsletter will serve as a trusted resource, providing insights, case studies, and expert discussions on litigation funding. To ensure accessibility and reach, it will be published in both Arabic and English, making it the go-to platform for businesses, legal professionals, and investors interested in this evolving field.

The key Impacts on the Legal Industry: 

  • There is Enhanced Access to Justice: SMEs and individuals can now challenge well-funded opponents without financial barriers.
  • Market Competitiveness: The entrance of international funders has led to the adoption of global best practices, benefiting claimants.
  • Stronger Negotiation Leverage: With financial backing, businesses can negotiate settlements more effectively, knowing they have the resources to litigate if necessary.

Also, there are reports that litigation funding in the UAE increased by 40% over five years, with SMEs as the largest beneficiaries. Hence, we can say that litigation funding has become a crucial tool in the UAE’s evolving legal ecosystem. As regulatory clarity improves and market awareness increases, its role in providing financial access to justice will only strengthen.

2. In your experience, how do cultural and legal nuances in the UAE influence the way litigation funding investments are sourced and structured?

According to my experience, The UAE’s litigation funding market is shaped by deep-rooted cultural values and a dual legal framework that integrates both civil and common law principles. For anybody, understanding these nuances is essential for structuring investments effectively.

I can say that broadly Cultural & Legal Influences includes factors such as:  

Preference for Arbitration & Mediation:
    • The UAE business community traditionally favors dispute resolution methods like arbitration and mediation over lengthy court proceedings.
    • Litigation funders must tailor their models to prioritize arbitration financing, particularly for high-value commercial disputes.
Sharia Compliance & Islamic Finance:
    • Many UAE businesses operate under Islamic finance principles, requiring litigation funding models to be structured without interest-based arrangements.
    • Alternative funding structures, such as success-based fees and equity-sharing, are gaining traction.
Confidentiality & Reputation Sensitivity:
    • Businesses and high-net-worth individuals value discretion in legal matters.
    • Litigation funders must implement strict confidentiality agreements and strategic case management to ensure reputational protection.
Regulatory Variations Between Onshore & Offshore Jurisdictions:
    • Offshore jurisdictions (DIFC & ADGM) have explicit litigation funding regulations, making them attractive venues for funded claims.
    • Onshore courts lack clear regulations, requiring funders to conduct extensive due diligence before financing claims.
Government & Public Sector Sensitivities:
    • Disputes involving government-linked entities require additional compliance measures and strategic planning.
    • Litigation funders must account for potential regulatory scrutiny when financing such cases.

If you research, you may find incidents like Dubai-based firms have secured litigation funding for a contractual dispute against a overseas partner, leveraging the ADGM’s favorable legal framework.

Precisely speaking, Cultural and legal nuances make the UAE a unique but highly promising market for litigation funding. Tailored investment structures that respect local customs, regulatory landscapes, and business preferences are key to success. In fact, we estimate that 60% of funded cases in the UAE involved arbitration, highlighting the preference for ADR.

3. What are the chief concerns that litigation funders have when it comes to investment in the UAE, and how would you allay those concerns?

Actually, if you see, The UAE is rapidly emerging as a key market for litigation funding, but as with any evolving legal landscape, obviously funders have legitimate concerns about investing in the region. Addressing these concerns requires a deep understanding of the regulatory environment, enforcement mechanisms, and legal complexities that define the UAE’s legal system.

Few genuine concerns for Litigation Funders could be: 

Regulatory Uncertainty:
      • Unlike jurisdictions such as the UK and Australia, UAE’s onshore courts lack a well-defined framework for litigation funding.
      • Offshore jurisdictions like the DIFC and ADGM have established regulations, but clarity is still evolving in onshore courts.
Enforcement Challenges:
      • A favorable judgment does not always guarantee successful enforcement, particularly in cross-border disputes.
      • UAE’s legal system allows for appeals and potential delays in execution, which can extend the time before a funder sees returns.
Case Viability and Recovery Potential:
      • Funders must assess whether cases have strong legal merit and a high probability of success.
      • There is also concern over whether claimants will be able to recover awarded damages, particularly if assets are difficult to trace.
Judicial Discretion and Precedents:

UAE courts do not always follow strict precedents, which creates unpredictability for litigation funders who rely on historical case outcomes for underwriting decisions.

However, the good thing is we can address these concerns through initiating appropriate measure, like:

Leverage Offshore Jurisdictions:
    • Encouraging claimants to litigate within DIFC or ADGM courts can provide a more predictable legal framework with explicit third-party funding regulations.
Comprehensive Due Diligence:
    • Litigation funders should conduct thorough case assessments, including analyzing asset recovery potential before committing to funding.
Enforcement Planning:
    • Collaborating with asset recovery firms and legal experts to ensure judgments are enforceable across jurisdictions.
    • Utilizing treaties such as the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
Risk-Sharing Mechanisms:
    • Structuring agreements with contingency elements can mitigate risks.
    • Working with law firms that offer success-based fees ensures that all stakeholders are aligned in their objectives.

To summarise, The UAE is a lucrative but complex market for litigation funders. By strategically selecting jurisdictions, conducting robust due diligence, and leveraging international enforcement treaties, funders can mitigate risks and take advantage of the growing demand for litigation finance in the region.

4. How do you manage duration and collectability risk? Are these more acute in the UAE than in other jurisdictions, and if so, how impactful are these to your underwriting criteria?

At WinJustice, we firmly believe that managing duration and collectability risk is one of the most critical aspects of litigation funding. In the UAE, these risks can be more significant due to procedural timelines and enforcement challenges. However, with a structured and strategic approach, they can be effectively mitigated. This is precisely what we implement at WinJustice—ensuring that every case is managed with precision, minimizing risks while maximizing successful outcomes.

Lets understand Duration and Collectability risks:

Duration Risk:
      • Court proceedings in UAE onshore courts can take longer due to multiple appeal stages.
      • Arbitration cases tend to resolve faster, particularly within DIFC and ADGM jurisdictions.
Collectability Risk:
      • Even if a judgment is awarded, claimants may face difficulties in collecting damages.
      • Defendants may shift or conceal assets, making enforcement challenging.

Our suggested strategies to manage these risks are:

1. Prioritize Arbitration Cases:

      • Arbitration is often faster than litigation and provides clear enforcement mechanisms.
      • DIFC and ADGM arbitration courts have robust mechanisms for enforcing awards internationally.

2. Early Case Assessment & Due Diligence:

      • Before funding a case, funders must evaluate the financial stability of the defendant and whether they have recoverable assets.
      • Engaging forensic accounting experts helps in asset tracing.Structuring Litigation Agreements with Milestones:
      • Including timelines in funding agreements helps ensure claimants and their legal teams are progressing cases efficiently.
      • Phased funding disbursements can incentivize timely case resolution.Working with Local Legal Experts & Asset Recovery Teams:
      • Partnering with firms specializing in UAE asset recovery and judgment enforcement can strengthen collectability efforts.

If we compare UAE to Other Jurisdictions:

    • UAE vs. UK: UK has established litigation funding precedents, making duration risk lower.
    • UAE vs. US: US litigation is costly but has a well-defined process for class action and third-party funding.
    • UAE vs. Singapore: Singapore offers a structured approach similar to DIFC, making it a comparable market.

Therefore, while duration and collectability risks are slightly higher in UAE than in more mature markets, leveraging arbitration, strong due diligence, and phased funding agreements can significantly reduce risks for litigation funders.

5. How do you envision the future of litigation funding in the Middle East over the next 5-10 years, and what key trends or developments do you believe will shape this future?

In my opinion, Litigation funding in the Middle East is at an inflection point. Over the next decade, the region will witness increased adoption of legal financing, supported by regulatory advancements, growing market awareness, and technological integration.

Some of major trends & developments shaping the Future, are like

Regulatory Evolution:
      • Onshore UAE courts may introduce formal litigation funding regulations, similar to DIFC and ADGM frameworks.
      • Governments in Saudi Arabia and Qatar are exploring third-party funding regulations, expanding the regional market.
Increased Market Adoption:
      • More law firms and corporate clients will turn to litigation funding, especially in high-value commercial disputes.
      • The construction and real estate sectors, which are prone to disputes, will see a rise in funding demand.
Technology & AI in Case Evaluation:
      • Artificial Intelligence (AI) will play a key role in risk assessment, helping funders predict case outcomes with higher accuracy.
      • AI-powered analytics will enhance due diligence and underwriting processes.
Expansion of Alternative Dispute Resolution (ADR):
      • Arbitration is expected to dominate litigation funding in the region due to faster resolution timelines and enforceability.
      • Growth of regional arbitration centers such as DIAC (Dubai

International Arbitration Centre) will further facilitate funded cases.

Entry of Global Players & Institutional Investors:
      • Large international litigation funders are likely to enter the Middle East, increasing competition and refining best practices.
      • Institutional investors, including hedge funds and private equity firms, will seek exposure to litigation funding as a diversified asset class.

Yes, there could be some challenges that may shape the future, like:

    • Ensuring ethical litigation funding practices to prevent frivolous lawsuits.
    • Balancing regulatory oversight with industry growth to maintain market credibility.

So, the next 5-10 years will see the Middle East, particularly the UAE, become a key hub for litigation funding. With regulatory progress, market maturity, and technological advancements, the region is poised for significant growth in third-party legal financing, offering both opportunities and challenges for funders and legal professionals alike.

Community Spotlights

Community Spotlight: Aisling Byrne, Co-Founder, Nera Capital

By John Freund and 4 others |

Aisling Byrne is the Co-Founder of Nera Capital, a pioneering legal funding provider reshaping the landscape of litigation finance. Hailing from Ireland, she co-founded Nera Capital in response to the financial challenges following the 2008 global economic downturn, recognising the need for innovative funding solutions to support law firms and their clients.

With deep expertise in litigation finance, she has driven Nera Capital’s expansion into the UK consumer market while spearheading commercial litigation funding across Europe and the USA. Under her leadership, the firm has played a pivotal role in funding landmark actions in many jurisdictions. Beyond her professional achievements, Aisling is a passionate equestrian, competing internationally in showjumping with a talented string of horses.

Company Name: Nera Capital

Company Description: Founded in 2011, Nera Capital was established with a bold vision - to revolutionise legal finance by seamlessly integrating modern technology with traditional values. By funding essential disbursements, Nera Capital empowers law firms to pursue justice without financial constraints, ensuring that clients can access the legal representation they deserve.

With a proven track record of delivering pragmatic funding solutions, Nera has helped partner firms achieve remarkable growth in a short time. More than just a funder, Nera Capital serves as a strategic partner, leveraging its industry expertise, technology and extensive network to drive success for its clients.

Company Website: neracapital.com

Year Founded: 2011

Headquarters: Ireland, with offices in Manchester and The Netherlands

Areas of Focus: Nera Capital provides Law Firm funding across a diverse range of claim portfolios, including Financial Mis-selling, Data Breach, Personal Injury, and more. Always at the forefront of legal finance, Nera continually explores new claim types and remains open to innovative funding opportunities.

Member Quote: “When it comes to litigation funding, strategy and collaboration are key. A well-structured funding solution requires more than just financial backing - it demands a deep understanding of legal complexities, a forward-thinking approach, and a team that is both skilled and adaptable. At Nera Capital, we believe in building long-term partnerships with law firms, providing them with not just capital, but also the strategic guidance and support needed to navigate challenges and maximise success. By combining financial and technical expertise with a keen insight into evolving legal landscapes, we ensure that meritorious claims receive the investment they need to deliver justice.”

Understanding Pre-Settlement Funding: A Resource for Plaintiffs Facing Long Legal Battles

By Harry Moran and 4 others |

Rockpoint Legal Funding has released a new educational overview on the role of pre-settlement funding for individuals involved in personal injury and other civil lawsuits. As court dockets swell and case timelines extend, plaintiffs often encounter mounting financial pressures that can influence their legal decisions. This overview examines the mechanics of pre-settlement funding, the considerations for deciding whether it is an appropriate option, and the broader context of litigation finance in the United States.

Pre-settlement funding—also known as legal funding or lawsuit advances—is a financial arrangement in which a provider offers immediate funds to plaintiffs who have an active legal claim. The advance is typically "non-recourse," which means that the plaintiff is only obligated to repay if the underlying case results in a monetary settlement or award. This structure aims to relieve short-term economic stress, such as covering medical bills or everyday living costs, without imposing the risk of personal liability if the case does not succeed.

Why Litigation Timelines Can Be Lengthy

In many jurisdictions, personal injury and other civil claims progress through multiple stages. The initial filing, discovery period, settlement negotiations, and potential trial can each introduce procedural delays. Moreover, defense counsel or insurance companies may seek extensions or engage in protracted negotiations, especially if the case is complex or involves substantial damages. These drawn-out timelines can place significant strain on plaintiffs who are juggling medical appointments, lost wages, or other unexpected expenses stemming from the incident in question.

How Non-Recourse Funding Operates

Non-recourse funding arrangements differ from traditional loans in two key ways. First, plaintiffs do not make monthly payments during the lawsuit's duration. Second, if the case concludes without a settlement or court award, the plaintiff typically owes nothing. However, if there is a successful outcome, the provider recovers its advance from the proceeds, plus any agreed-upon fees or charges. Because repayment depends on the lawsuit's success, funding companies evaluate the viability of a claim by reviewing documentation such as medical records, police reports, and legal filings. This vetting process helps determine both eligibility and the potential amount of funding offered.

Considerations for Plaintiffs

While pre-settlement funding can offer financial breathing room, it is not a universal solution for every litigant. Plaintiffs are advised to consult closely with their attorneys before deciding to move forward with an advance. An attorney can provide guidance on whether anticipated settlement amounts reasonably justify the costs associated with funding. Additionally, plaintiffs should take time to review any contract terms carefully, paying particular attention to fee structures and potential caps on interest. Regulatory requirements for transparency vary from state to state, and consumer protection advocates often encourage individuals to ask prospective funders for itemized disclosures that outline how expenses and interest accumulate over time.

Balancing Immediate Needs with Long-Term Outcomes

For many plaintiffs, the main appeal of pre-settlement funding lies in the ability to cover urgent expenses without feeling pressured to accept a premature or undervalued settlement. Financial stress can sometimes overshadow the pursuit of a fair legal resolution. Having access to funds to pay rent, medical bills, and utility costs can enable individuals to focus more effectively on recovering from injuries and collaborating with their legal teams. At the same time, the additional fees tied to funding must be weighed against the potential difference a plaintiff might receive if they negotiate a higher settlement by waiting. Striking a balance between meeting immediate needs and preserving future gains is a critical part of the decision-making process.

Regulatory Landscape and Industry Best Practices

The legal funding industry is subject to varying degrees of oversight. Several states have enacted or proposed regulations to ensure consumer protections. In some jurisdictions, legislators have mandated clear and conspicuous disclosures regarding interest rates, fee schedules, and any other costs that might be included in the repayment obligation. These efforts aim to safeguard plaintiffs from overextending themselves financially or unknowingly entering into agreements with unfavorable terms. Reputable legal funding companies generally support transparent industry standards, seeing them as essential for maintaining trust and helping plaintiffs fully understand the implications of the agreements they sign.

Potential Impact on the Legal Process

Plaintiffs considering pre-settlement funding often wonder whether accessing an advance will change how negotiations proceed. While the presence of funding does not directly alter the defendant's or insurance company's approach, plaintiffs who relieve their short-term financial hardships may feel less pressure to settle immediately. This dynamic can sometimes allow parties to conduct more thorough investigations, secure additional expert opinions, or wait for crucial evidence to come to light. Nonetheless, case outcomes depend on numerous factors—including liability assessments, the strength of the evidence, and judicial proceedings—and not solely on whether the plaintiff has opted for a funding advance.

Addressing Myths and Misconceptions

Despite growing awareness, misconceptions about lawsuit funding persist. One common myth is that plaintiffs give up control of their case when they secure an advance. In practice, a reputable funding provider does not direct case strategy or negotiations; plaintiffs and their attorneys maintain full authority over legal decisions. Another misconception is that high rates inevitably accompany all pre-settlement advances. While some companies may impose significant fees, others strive for more balanced terms. Conducting comparative research and consulting third-party resources can help plaintiffs identify funding options that align with their specific needs.

Informing Plaintiffs and Attorneys

Through its resource materials and ongoing educational initiatives, Rockpoint Legal Funding aims to clarify how pre-settlement advances fit into the broader legal landscape. Attorneys can benefit by understanding the various funding options available to clients, enabling them to offer well-rounded advice. Meanwhile, plaintiffs gain insight into navigating what can be a confusing world of financial products and services. Informed decision-making involves not only estimating the value of a legal claim but also realistically appraising personal financial requirements and the time it may take to resolve a case.

About Rockpoint Legal Funding

Rockpoint Legal Funding provides non-recourse cash advances to plaintiffs in personal injury and other civil cases. The company's primary goal is to help individuals facing extended litigation address pressing financial concerns so they can pursue a fair legal outcome. Through transparent practices, Rockpoint endeavors to equip both plaintiffs and their attorneys with clear information, enabling them to decide whether a funding advance is appropriate for their circumstances.

For more information about Rockpoint Legal Funding, visit rockpointlegalfunding.com.