Question 1

What is litigation financing?

Accepted Answer

Litigation financing is an alternative investment where investors provide capital to support legal cases in exchange for a portion of any settlement or judgment.

Question 2

How does this compare to traditional investments?

Accepted Answer

Unlike stocks or bonds, litigation financing returns are uncorrelated with market movements, offering true portfolio diversification.

Question 3

What types of cases can I invest in?

Accepted Answer

You can invest in commercial litigation, intellectual property disputes, arbitration cases, and class action lawsuits.

Question 4

What's the minimum investment?

Accepted Answer

Minimum investments typically start at $25,000, though this varies by case and platform.

Question 5

What are the risks involved?

Accepted Answer

Primary risks include case loss, longer-than-expected case duration, and potential recovery issues even with favorable judgments.

Question 6

How do you assess case quality?

Accepted Answer

Cases are evaluated based on legal merit, damages calculation, defendant ability to pay, and the track record of legal counsel.

Question 7

What returns can I expect?

Accepted Answer

Historical returns range from 20-40% annually, though individual case returns can vary significantly.

Question 8

How often do cases lose completely?

Accepted Answer

Industry-wide, approximately 10-20% of funded cases result in complete loss, though this varies by case type and selection criteria.

Question 9

How do I start investing?

Accepted Answer

Begin by completing our investor qualification process, reviewing available cases, and selecting investments that match your risk profile.

Question 10

What documentation do I need?

Accepted Answer

You'll need to provide accredited investor verification, complete KYC requirements, and sign investment agreements.

Question 11

How long do cases typically take?

Accepted Answer

Most cases resolve within 12-36 months, though complex litigation can take longer.

Question 12

Can I exit an investment early?

Accepted Answer

Litigation investments are generally illiquid until case resolution, though some secondary market options may be available.

Question 13

How are settlements distributed?

Accepted Answer

Distributions follow a waterfall structure: legal fees, case expenses, investor principal, then profit sharing as agreed.

Question 14

What happens if a case settles?

Accepted Answer

Settlements are typically faster than trials and often result in quicker returns, though amounts may be lower than trial victories.

Question 15

Are there tax implications?

Accepted Answer

Returns are generally taxed as capital gains. Consult your tax advisor for specific implications.

Question 16

What reporting do investors receive?

Accepted Answer

Investors receive quarterly case updates, significant development notifications, and detailed settlement reports.

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Experienced Investors

General Questions

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Every detail matters for your practice. We've covered them all here.

Experienced Investors

General Questions

Smart Money Asks
Smart Questions