Commercial legal finance, or litigation funding, litigation finance, or third-party funding, involves businesses and law firms utilizing funds from an external financial provider to cover commercial litigation and arbitration costs.

This funding can take various forms (such as fees, expenses, advances, or portfolio funding) and does not affect control, which stays with the claimant. Normally non-recourse, the capital does not involve debt, with the investment and returns contingent upon a successful resolution.

What Are the Benefits of Legal Aid

Legal aid is frequently the sole support for individuals confronting impactful outcomes like losing their residence, job, or custody of their children.

Studies indicate that offering legal services "substantially reduces cases of domestic violence." The help provided varies based on the client's legal issue.

Legal aid attorneys support clients in diverse areas beyond courtrooms, represent them during legal proceedings, and frequently spearhead intricate legal efforts aiming to bring about systemic changes that impact numerous individuals in similar situations.

Who Qualifies for Legal Aid?

Despite the dedicated efforts of lawyers who frequently dedicate their careers to assisting low-income individuals, programs lack sufficient resources. They must prioritize helping the most disadvantaged clients with a limited number of critical legal issues.

Despite this, around half of eligible individuals seeking help from legal aid programs cannot receive assistance. Those who do receive help usually get brief advice and limited services. Those who are not helped must depend on self-help materials and legal information, which are also inaccessible to everyone in need.

Why Businesses Opt for Litigation Financing

Litigation financing provides numerous benefits that appeal to companies dealing with expensive legal disputes. This guide to litigation finance offers additional details on the topic, including why businesses opt for this form of financial support.

Here are several primary reasons why businesses are increasingly embracing this type of financial assistance.

Financial Support

Legal disputes are known for their high costs. With expenses such as attorney fees and court charges, the financial burden escalates rapidly.

Litigation financing eases this financial pressure. This enables businesses to concentrate on their core activities without the concern of growing legal fees.

Risk Mitigation

Litigation inherently carries risks. Even strong cases can crumble, resulting in substantial financial setbacks. Through litigation financing, companies can shift some of this risk to the financing entity.

If the case doesn't succeed, the business is typically not obligated to reimburse the funds, making it a more secure option.

Resource Allocation

By obtaining external financing, businesses can distribute their internal resources more effectively. Instead of drawing funds from vital areas like research and development or marketing, companies can utilize litigation funding for legal costs. This strategy ensures that legal challenges do not hinder the company's progress and creativity.

Who Provides Legal Aid?

Legal aid providers come in various sizes and focus areas; some cater to local needs or specialize in specific issues like domestic violence or employment practices, while others handle cases citywide or statewide with minimal constraints on the type of cases.

The total funding for civil legal aid delivery in the U.S. is approximately $1.345 billion. The Legal Services Corporation is the country's primary financial legal assistance supporter initiative, contributing roughly a quarter of this funding.

LSC, a federally funded nonprofit organization, distributes grants to 134 recipients nationwide. Unlike other funding sources for civil legal aid, grantees receiving federal aid from LSC must adhere to specific advocacy and client eligibility regulations.

Endnote

Seeking legal information and resources demonstrates strength and a proactive stance in safeguarding your interests. Feel free to contact us for assistance, even if you have doubts about eligibility. Let your legal aid organization assess your eligibility and choose to handle your case.