Litigation Financing at Yield Bridge
- Eileen Bransten
New York Supreme Court Justice
“Litigation funding allows lawsuits to be decided on their merits, and not based on which party has deeper pockets or stronger appetite for protracted litigation.”
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LITIGATION FINANCING BONDS
Invest in a meticulously sourced portfolio of litigation assets.
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Alternative fixed-income bonds in the litigation sector, also known as litigation finance bonds, are financial instruments that allow investors to participate in the financing of legal disputes in exchange for potential returns. These bonds are often used by law firms and parties involved in litigation to obtain financial support to cover legal fees and related expenses.
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A key characteristic of alternative fixed-income bonds in the litigation field is their short maturity. Unlike other types of bonds, these products typically have a relatively short duration – generally between 1 and 3 years – allowing investors to recover their capital more quickly.
This feature is particularly appealing to investors seeking to optimise liquidity and reduce exposure to risk.
Furthermore, alternative fixed-income bonds offer investors the opportunity to diversify their portfolios by investing in a sector that is relatively uncorrelated with traditional markets.
LITIGATION FINANCING BENIFITS
Third party litigation funding (TPLF) offers plaintiffs and investors several benefits. For plaintiffs, it provides access to capital for litigation expenses, potentially enabling them to pursue claims they otherwise couldn't afford. For investors, TPLF can offer high returns, especially in cases with strong prospects of success.
Funding on Case Merits
Funding issued on the strength of cases, not the plaintiff’s personal credit rating, or prevailing opinion. By sourcing cases which offer predetermined characteristic’s, funding vehicles can be strategic and targeted. Our private credit partners undertake significant due diligence to achieve a 88% success rate.
Strength by Assosiation
Working with a professional, experienced litigation funder sends a powerful message to the opposing party that they will pursue the claim until a reasonable outcome has been achieved and that resources are no longer an obstacle. Using the David vs Goliath analogy - we're specifically working with the financial under dogs to facilitate justice.
Removing Constraints
By leveraging third-party funding, companies can remove financial constraints that might otherwise limit their legal department's capabilities. This enables the department to pursue claims that would have remained dormant, transforming it from a cost centre into an ancillary profit centre.
INDUSTRY CASE CHARACTERISTICS
Litigation funding can be applied to a wide variety of lawsuits, all typically commercial litigation among large institutions. Funders often focus on high-stakes financial litigation and intellectual-property litigation, involving highly sophisticated lawyers and claim-holders with high-value claims. Funding can also be applied to bankruptcy claims, insurance claims, contract disputes, and domestic and international arbitration. Funding is typically on the plaintiffs’ side, although funding could be used by defendants to cover their legal costs in exchange for repayment and a success fee if the case is dismissed, for example. The industry is split into the following basket of dispute classifications.
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TPLF MARKET OVERVIEW
​The Litigation Funding Investment Market exhibits several prominent trends. One key driver is the rising costs of litigation, which has increased the demand for alternative funding sources. Investors are seeking alternative assets with stable returns, and litigation funding offers the potential for attractive yields. Another driver is the growth of mass tort and class action lawsuits, which present substantial funding requirements.
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​Opportunities in the market include the expansion of litigation funding into new jurisdictions and practice areas. The use of technology and data analytics for case assessment and risk management is also creating opportunities. Furthermore, the increasing awareness and acceptance of litigation funding among law firms and corporations are driving market growth.
LITIGATION FINANCING
INVESTMENT OPPORTUNITIES
Invest in a meticulously sourced portfolio of litigation assets via fixed-income bonds that combines high, fixed returns with robust security structures.
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Sharing our commitment to due diligence, our partners are market leaders in the sector, and identifies cases for investment through its extensive network of international law firms and quantum value firms with the following characteristics.
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​Potential for multiple ROI​
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Efficiency – 12 months on average per case
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Secure success – with an 80% minimum threshold
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​Global geography – with a particular focus on undervalued markets in the Middle East, Asia and Africa
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​The global litigation funding market is predicted to grow to $25.8 billion by 2030.​ Discuss with our team the best way for you to position yourself in this market today!.
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Key Takeaways
The lucrative out come of commerical ligiation validates the underlying value of the asset class.
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By working with the best in class industry professionals to analysis and select cases based on their potentional for successs can significantly reduce risk.
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Yield
Litigation funding is a non-correlated alternative asset class with the potential for higher returns than the traditional asset classes of stocks, bonds and cash. Fixed-income bonds in litigation funding typically offer returns of between 8% and 14% per annum.
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Diversification
There’s low correlation between legal funding and traditional asset classes of stocks and cash. Additionally, our funder provides asset class diversification by including a variety of cases spanning various jurisdictions and sectors, meaning your investment isn’t dependant on a single case type.
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Duration
By working with a basket of cases at verifying stages, litigation bonds can offer high returns coupled with short duration maturity periods. Our provider offers coupons ranging from between 1-3 years. Investors have the opportunity to role over their returns working under the same coupon terms.
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Security
The risks in TPLF are case specific and mitigated through due diligence. Our funder works with a basket of cases and has achieved a 80%+ success rate. All products incorporate robust security features to protect investor capital - meaning the very worst case scenario is the return of your initial.