Affirmative Claim

A cause of action in which the funded party asserts a right to monetary recovery — as opposed to a defensive posture seeking to defeat a claim brought against it. Litigation funders almost exclusively finance affirmative claims, because only a successful affirmative outcome generates proceeds from which the funder can be repaid. The strength and quantum of an affirmative claim directly determines the funder's return profile and its willingness to commit capital. Claims with clearly documented damages, a solvent defendant, and a well-developed liability theory attract the most competitive funding terms.

Because only an affirmative claim generates proceeds a funder can share in, the very first underwriting question is whether the funded party is a plaintiff or a counterclaimant with net-positive exposure, not a pure defendant. Funders structuring deals around counterclaims or crossclaims scrutinize the procedural posture carefully, since a party's affirmative claim can be dismissed, stayed, or offset in ways that reduce recoverable value even where the underlying merits are strong.