Litigation Finance
Litigation finance provides capital against a case portfolio, litigation-related cash flow, or a law firm’s contingent fee book. The facility sits on the firm’s book of claims. The asset is the recovery or the fee stream.
The usual borrowers are law firms and litigation finance companies. Lenders look at expected fees, case mix, time to resolution, and how the book is serviced. The focus is business and portfolio finance, not consumer advances against an individual’s personal-injury claim.
Terms and facility size sit on Specialty Finance.
How This File Is Underwritten
The lender underwrites the case book and the firm or platform that owns it.
- Who the borrower is: A contingency firm, a commercial litigation fund, or a platform that funds cases. A firm bringing its first outside capital into the practice is underwritten differently than one that has run a facility like this before.
- The book: Case types, stages, jurisdiction mix, expected duration, historical recovery vs. projected recovery. A book weighted toward cases nearing resolution funds differently than one still early in discovery, as the timeline to cash is one of the variables driving how the facility is priced.
- Concentration: One case, one counsel, one defendant, or one jurisdiction carrying too much of the expected recovery may limit how large the facility is sized. A single large matter carrying most of the expected recovery is a materially different risk than the same dollar amount spread across a dozen independent cases.
- Servicing and reporting: How cases are tracked, who controls settlement decisions, and whether the lender gets a clean view of the portfolio. A firm that reports case status and settlement activity on a regular cadence gives a lender more confidence than one that only produces an update when asked.
- Use of proceeds: Working capital for the firm, origination capacity for a platform, or leverage on an existing case book. Not personal expenses for an individual plaintiff. Proceeds fund the business of litigation or funding cases, not any single case’s outcome directly.
Timelines are long. Capital often sits until settlement or judgment. Rate and structure follow that duration.
What Usually Binds
- Who the borrower is: A contingency firm, commercial litigation fund, or platform that already funds cases.
- The book: Case types, stages, jurisdiction mix, and historical recovery vs. projected recovery.
- Concentration: One case, one counsel, one defendant, or one jurisdiction.
- Servicing and reporting: How cases are tracked and whether settlement is reported on a regular cadence.
- Use of proceeds: Working capital, origination capacity, or leverage on an existing book, not an individual’s living expenses.
- Firm or platform operations: The book is only an asset if the practice continues to operate.
What To Send First
- Portfolio summary, case count, type, stage, jurisdiction for each active matter
- Historical close and recovery data, showing actual against projected outcomes
- Concentration detail on top cases, counsel, and defendants by dollar exposure
- Firm or platform financials
- Debt schedule and existing lines, with current advance rate and availability
- Servicing / case-management description
- Use of proceeds
When Litigation Finance Is Not The Right Fit
If the need is ordinary B2B invoices for legal staffing or vendor work, use invoice factoring or ABL. If the need is a bank line against a firm’s fee-paying hourly book with clean AR, start with ABL. i95 Capital does not offer consumer financing for individuals looking for advances on personal injury cases.
FAQs
Do you fund a single case?
The files that fit here are portfolios and platforms, or firms with books of matters, not one standalone claim. Consumer cases are not funded regardless of size. Underwriting is built around a business and its portfolio, not an individual’s outcome.
Is the lender taking the legal outcome risk?
Structures differ by lender and by book. Some are structured as loans against the portfolio with a fixed repayment obligation regardless of case outcomes. Others are closer to portfolio finance, where the economics move with recovery, so the lender does carry some of that risk directly.
Does the lender have any say in case strategy or settlement decisions?
Typically, no. The firm or platform generally keeps control of strategy and settlement. The lender is financing the book, not directing litigation. Servicing and reporting terms spell out what visibility the lender gets, not what authority it has over how a case is run.
What happens if a case in the portfolio settles for less than projected?
The shortfall is priced into the book from the start through conservative marking and a spread between historical and projected recovery, not treated as a surprise default. A single case coming in under projection is expected. A pattern of it across the portfolio affects the facility.
How is a facility like this priced?
Pricing follows the risk in the underlying book. Case timing and historical recovery rate are two of the biggest drivers. A portfolio weighted toward cases close to resolution with a strong recovery track record prices more favorably than one heavy with early-stage or unproven matters. Concentration and reporting quality factor in as well.
Does the firm need a long operating history to qualify?
Not necessarily, though a firm with a documented track record of case outcomes is a stronger file than one relying mostly on projections. A newer platform can still qualify if the underlying case book itself is far along and diversified.