Bilateral Funding Agreement

A litigation finance contract between a single funder and a single claimant covering one or more specified claims, as opposed to a portfolio arrangement involving multiple cases or law firm relationships. Bilateral agreements define the funded amount, the funder's return multiple or percentage of recovery, priority of repayment, management rights over the litigation, and conditions for termination. These agreements are the most common structure in single-case commercial litigation finance and are typically negotiated directly between the funder's legal team and the claimant's counsel. Key negotiating points include the funder's right to consent to settlement, information rights, and the waterfall governing proceeds distribution.

The bilateral structure is the default for single-case commercial funding because it lets the funder tailor consent rights, information rights, and the return waterfall precisely to one claim's risk profile — something a standardized portfolio facility cannot do as easily. Funders negotiate settlement-consent thresholds and termination triggers most heavily in bilateral agreements, since without portfolio diversification to fall back on, the funder's entire return depends on how that single matter is managed to resolution.