There’s a lot of talk these days about the role of legal departments shifting from that of a business’s cost center to value generator. Often, “value generator” means the legal department strategizes with the business to achieve desired outcomes. However, many legal departments are taking this mission to a whole different level by creating a profit center through the pursuit of legal claims.
Traditionally, litigation has been thought of as a risky venture for law departments, with potential legal costs being weighed against the likelihood and strategic importance of a positive outcome. But recently, a surprising way for legal departments to mitigate the risk has emerged: third-party funding of litigation. An example would be a recent case, Miller UK Ltd.and Miller International LTD. vs. Caterpillar, Inc., where the former used litigation funders.
There are now several sources of outside funding that law departments may be able to tap into in order to fund their litigation costs. In return for their investment, the funders will expect a payment should the litigation be successful. This trend began in the UK and Australia and is restricted in some US states, but according to a recent survey American lawyers are warming to the idea.
Have you ever used 3rd party funding for litigation? If not, is it something you would consider?