Question 1

What types of commercial cases does Criterica Capital fund?

Accepted Answer

Criterica Capital funds commercial litigation across a broad range of case types: breach of contract, securities fraud, antitrust and competition law violations, intellectual property infringement (patent, trade secret, copyright), insurance coverage disputes, real estate and construction defects, employment class actions, mass tort claims, government contracts disputes, environmental liability claims, and international commercial arbitrations. We evaluate cases on merit, not category — any commercial claim with a strong liability theory, quantifiable damages, and a solvent defendant is a potential candidate. We do not fund family law, probate, or criminal defense matters.

Question 2

What is the minimum case value for commercial litigation funding?

Accepted Answer

Commercial litigation funding is most economical for cases with a reasonable settlement or judgment value of at least $1 million. At smaller case values, the funder's return requirements and the legal costs of structuring the arrangement may not justify the complexity. Many commercial litigation funding arrangements involve cases with expected recoveries in the $5 million to $500 million range. For cases below the $1 million threshold, single-case pre-settlement funding for individual plaintiffs may be more appropriate. For portfolios of smaller commercial cases, portfolio-level financing may provide a more efficient structure.

Question 3

Does Criterica Capital fund defendants, or only plaintiffs?

Accepted Answer

We primarily fund claimants and plaintiffs pursuing affirmative recoveries. Defendant-side funding — where capital is provided to help a company manage the costs of defending itself — is a different product that requires a different underwriting framework. Defendant funding is available in limited circumstances, typically for small and mid-size businesses that face well-capitalized adversaries and need capital to mount a proper defense through trial. Contact our institutional team to discuss defendant-side situations specifically.

Question 4

Can a corporation use litigation finance for claims arising from M&A transactions?

Accepted Answer

Yes. Post-merger claims, representations and warranties disputes, indemnification claims, and earnout disputes are fundable commercial claims. These cases often involve clear liability theories (specific contract representations), quantifiable damages (deal value minus actual value), and solvent counterparties (the other party to the M&A transaction). The challenge in M&A litigation is timing — deals have contractual notice and indemnification periods, and claims must be brought within those windows. We can engage quickly when companies face M&A dispute deadlines.

Question 5

Can multiple plaintiffs with related claims access funding through a single structure?

Accepted Answer

Yes. Portfolio structures allow multiple claimants with related claims — for example, a group of investors in a securities fraud matter, or a set of companies affected by the same anticompetitive conduct — to access a single funding arrangement. This can improve economics for all parties and simplify the funder's underwriting process. Joint representation and coordination agreements among claimants need to be addressed before funding is structured. Our team has experience managing multi-party funding arrangements and can advise on the structural requirements.

Question 6

How does Criterica Capital evaluate a commercial litigation claim?

Accepted Answer

We apply a six-factor evaluation framework: (1) Liability — the strength of the legal theory, quality of evidence, and anticipated defense arguments; (2) Damages — the methodology for calculating damages, supporting expert analysis, and range of likely recovery; (3) Collectability — the solvency, insurance coverage, and asset base of the defendant; (4) Duration — expected time from investment to resolution, including appeals risk; (5) Attorney quality — the capability and track record of the litigation team; and (6) Return — whether the expected recovery, adjusted for probability and duration, supports our capital cost requirements. Criterica Capital layers outcome model predictions trained on 106M+ court records onto this qualitative framework to calibrate probability estimates by jurisdiction, judge, and case type.

Question 7

What information do you need to begin the underwriting process?

Accepted Answer

The initial stage requires a case summary covering: the legal theory, key facts, defendant identity and apparent solvency, damages theory and methodology, current litigation status, attorney representation, and the amount and use of capital sought. This summary allows us to make a preliminary qualification determination. A positive preliminary assessment triggers a full underwriting review, which requires: pleadings and key motions, damages expert reports, relevant discovery to date, and any prior court rulings on the matter. We sign NDAs before receiving confidential case materials.

Question 8

How long does underwriting typically take?

Accepted Answer

For straightforward commercial cases with clear liability and established damages methodology, preliminary qualification takes 48 to 72 hours and full underwriting takes two to four weeks. Complex cases — multi-defendant antitrust claims, large patent portfolio disputes, or cases with contested damages methodologies — may take four to eight weeks for full underwriting. We provide a clear timeline and milestone schedule at the start of the process. Urgent situations (imminent trial dates, settlement deadlines) can be accommodated with expedited review.

Question 9

What role do outside experts play in your underwriting?

Accepted Answer

For large commercial cases, we may engage independent experts to validate the plaintiff's damages methodology, assess the technical merit of patent or IP claims, review industry-specific market dynamics in antitrust cases, or evaluate the financial condition of the defendant. These expert engagements are funded by Criterica Capital and do not create additional cost for the plaintiff or their counsel. Expert engagement is disclosed to the funded party before it occurs. Expert reports may be shared with the funded party's counsel.

Question 10

How is a commercial litigation funding arrangement typically structured?

Accepted Answer

The most common structure is a non-recourse investment in exchange for a defined multiple of invested capital (e.g., 2.0x–3.5x) or a percentage of the net recovery. The funder's return is paid at resolution — from settlement proceeds or judgment collection — before the plaintiff receives its net recovery. Attorney fees are typically paid before funder return in the distribution waterfall, consistent with most jurisdictions' professional responsibility rules. The specific terms — investment amount, return multiple, payment priority — are negotiated based on case characteristics and are specified in the funding agreement reviewed by the plaintiff's counsel.

Question 11

Can funding be used to cover both legal fees and case costs?

Accepted Answer

Yes. Commercial litigation funding can cover attorney fees (on a contingency or hybrid basis), case-related expenses (expert witnesses, e-discovery, depositions, trial preparation), and in some structures, the funded company's internal costs and lost management time associated with the litigation. The scope of what funding covers is negotiated and specified in the funding agreement. Funders who also cover attorney fees typically have a more significant economics stake in the case — the return multiple reflects the higher capital at risk.

Question 12

Does the funder receive any equity or ownership interest in the funded company?

Accepted Answer

No. Commercial litigation funding does not involve any equity transfer, ownership stake, or corporate control rights in the funded company. The funder's interest is limited to a contingent right to a share of the case recovery. This distinction is important for companies concerned about investor rights, voting control, or board governance. Litigation funders do not sit on boards, do not receive management fees, and have no rights in the funded company beyond the case-specific recovery interest.

Question 13

What happens if the case is lost at trial?

Accepted Answer

For non-recourse funding arrangements, an adverse trial result means the funder absorbs the full loss of deployed capital. The funded plaintiff owes nothing. This is the defining feature of non-recourse commercial litigation finance: the funder assumes the risk of an adverse outcome. The funder has no claim against the plaintiff's other assets, no recourse against the plaintiff's revenue or balance sheet, and no right to convert its position to equity or debt if the case fails.

Question 14

Can the funder exit a case mid-litigation?

Accepted Answer

Funding agreements typically specify the conditions under which a funder can exit a case or demand early repayment. Standard provisions address: material misrepresentation of case facts at underwriting, attorney withdrawal or replacement without funder consent, settlement acceptance below a defined floor without funder approval, and material adverse changes in case status. Absent these specific triggers, the funder does not have a general right to exit a case early and demand repayment. Funder exit rights are negotiated and clearly documented before funding begins.

Question 15

What happens if the defendant cannot pay a judgment?

Accepted Answer

Collectability risk — the possibility that a favorable judgment cannot be enforced because the defendant is insolvent, has transferred assets, or is otherwise judgment-proof — is evaluated at underwriting. A large judgment against an insolvent defendant has no practical value. We assess defendant financial condition carefully before committing capital, including reviewing public financial disclosures, insurance coverage, and asset location. For cases where collectability risk is significant, we may price this risk into our return requirements or decline to fund entirely.

Question 16

Can cases be settled without funder approval?

Accepted Answer

The plaintiff and their counsel retain full authority to settle the case at any amount and at any time. The funding agreement may include a floor settlement provision — a minimum settlement amount below which the funder must consent — but settlement decisions are ultimately the plaintiff's to make. Funder consent to settlement is not required unless the agreement specifically provides for it, and even then, such provisions must comply with professional responsibility rules that prohibit arrangements that limit attorney professional judgment. We structure agreements consistent with Model Rules 1.2 and 1.8.

Question 17

Do you fund cases against government entities or agencies?

Accepted Answer

Yes, with jurisdiction-specific considerations. Claims against federal agencies under the Contract Disputes Act, COFC jurisdiction, and ASBCA board proceedings are fundable. State government claims vary by jurisdiction — sovereign immunity waivers differ significantly by state. International investment treaty arbitrations against foreign sovereigns (investor-state disputes) are fundable through ICSID and UNCITRAL arbitration structures. Government defendant cases typically require longer duration assumptions given public sector litigation timelines.

Question 18

Can startups and early-stage companies access commercial litigation funding?

Accepted Answer

Yes. Early-stage companies and startups are well-suited to commercial litigation funding because they often have valuable claims — IP infringement, misappropriation, breach of contract with larger companies — but limited capital to pursue them. For startups, litigation funding provides access to sophisticated legal representation and the staying power to pursue a case through trial without draining operating capital. We evaluate the quality of the legal claim, not the funded company's revenue or balance sheet. Startups have funded claims that resulted in nine-figure recoveries using this product.

Questions from corporate counsel and law firms about commercial funding.