Litigation funding is one of the most misunderstood areas of law, and in this article we explore the top three legal myths relating to litigation funding.
1. Litigation Funding Is Risky
Litigation funding offers financial support to cover the legal expenses incurred during a lawsuit and is available in various forms from lenders such as https://www.novo-modo.co.uk/litigation-funding, ranging from a percentage of the winnings if the case is successful through to a more traditional loan arrangement in which the amount borrowed is repaid plus interest on conclusion of the case. Always check that you understand the terms of the arrangement before you take out litigation funding, and it is no riskier than any other form of finance.
2. Litigation Funding Is Only Useful for Big Businesses
Actually, litigation funding is available to individuals and can be the deciding factor in a successful outcome for them. Litigation funding allows individuals with limited funds effective access to justice via the ability to pursue valid cases that they otherwise could not afford.
3. Litigation Funding Is Unregulated
Litigation funding in the UK is currently self-regulated; however, a recent report by the Civil Justice Council’s Working Group has recommended that this system of self-regulation be replaced by a statutory regime in which a sliding scale of regulation will be applied based upon the type of individual or organisation being funded.
In conclusion, though change is inevitable and driven by the conclusions of the Civil Justice Council’s Working Group, what is clear is that the need for litigation funding remains with effective safeguards in place.
