Six Criteria to Consider When Selecting a Funder

July 27, 2019
As litigation funding continues to grow in Canada, how can claimants differentiate between funders and make an informed choice for their funding needs?

As one of the oldest and most successful commercial litigation funders, we at Bentham IMF have consistently advised claimants to do their homework when establishing a relationship with a funder. Here are six decisive factors we believe should be considered by claimants when evaluating litigation financing providers:

 

  1. A Track Record of Success.
    Has the litigation funder consistently invested in successful cases? Does it know how to evaluate matters to determine their potential value and chances of success? Litigation is inherently unpredictable, and reputable funders take great care to support only those matters that are well positioned to generate a successful recovery both for themselves and, importantly, the claimant. At Bentham, we are proud to have achieved a global 90% success rate on over 184 completed investments. We also work with claimants and counsel, as requested, to help position the case in its most positive light.
  2. Reliability and Transparency.
    Can the funder deliver on its promises? Claimants should be wary of funders whose financing terms look too good to be true, and should do their homework about the funder’s financial position. A well-established commercial dispute resolution funder like Bentham can help guarantee that funds will remain readily accessible throughout a funding relationship. Bentham is a publicly traded company (ASX:IMF), which provides claimants with a wealth of information about our financial health and stability. This level of transparency, we have found, is often comforting to the boards and management teams of companies seeking financing, and to courts when approving litigation funding agreements in the context of class action proceedings.
  3. Experience and Reputation.
    Claimants should carefully consider the funder’s reputation and experience in the marketplace. Bentham’s team is comprised of experienced lawyers who have spent their careers litigating and evaluating cases.They have deep relationships within the legal community and with crucial subject-matter expert witnesses.
  4. Continuity.
    When working with Bentham, a dedicated team of lawyers will be assigned to assess a claimant’s case from the commencement of the funding process through to the end of the litigation. Working with the same people throughout – who understand the nuances of the case and build a strong relationship with the claimant and counsel – ensures a smooth process and a thorough understanding of every facet of a claimant’s case.
  5. Ethical Standards.
    Most established dispute resolution funders adhere to legal ethics standards and sound business practices. However, an ethical lapse by a funder can jeopardize the cases it has financed, to the detriment of both the claimants and their counsel. Bentham takes its business and legal ethical responsibilities very seriously and adheres to the highest ethical standards. This is reflected in Bentham’s relationship with claimants. Bentham never assumes control over litigation. Though our team is happy to provide strategic litigation advice if requested, important strategy decisions are squarely within the purview of a claimant and its counsel.
  6. An Innovative Approach.
    Dispute resolution funders that strive to develop new creative funding solutions for claimants can provide far greater opportunities to maximize clients’ interests than funders focused on single-case investments. For instance, Bentham finances portfolios of litigation to mitigate risk for both companies and law firms. We work with claimants to ensure that our proposals reflect the nuances of each case.
 
It is important for law firms and claimants to conduct due diligence when partnering with a commercial litigation funder. They should exercise careful judgement in evaluating the funder’s track record, reputation, and financial position. Such diligence should lead them to the most reliable funder—one that offers a history of success and conducts itself in a fair, transparent and ethical manner.

To discuss your funding needs with a funder that is at the forefront of the litigation financing industry, contact us for a consultation.

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