Understanding litigation funding

What is Litigation Funding?

Litigation funding is where a third party provides all or part of the finance required to cover legal costs incurred by bringing about a claim. The funder either charges interest on the funds, receives an agreed share of winning case proceeds or a mix of the two. If a case loses the litigant is protected by ATE Insurance and has nothing to pay.

What is ATE Insurance?

After The Event (ATE) insurance is an insurance policy that protects the litigant from paying legal fees and expenses if their case loses. Although it is not a legal requirement to have a policy in place to pursue a legal dispute, without one a litigant may be exposed to unnecessary financial risks. If a litigant is using a litigation funder it is normally compulsory to have a suitable ATE insurance policy on risk.

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