Commercial Litigation Finance

A funding arrangement in which a third party provides capital to cover the costs of commercial litigation — including legal fees, expert costs, and disbursements — in exchange for a share of any recovery. The funder bears the financial risk of an adverse outcome on a non-recourse basis, meaning repayment is contingent solely on a successful result. Commercial litigation finance is most commonly deployed in high-value business disputes where the claimant has a strong legal position but lacks the liquidity or risk appetite to fund proceedings internally. Funders evaluate cases on expected recovery multiples, case duration, and the creditworthiness of the opposing party.

Funders underwrite commercial claims against five linked variables — liability, damages, collectability, duration, and counsel quality — and will not deploy capital unless every one clears a threshold, because a strong liability theory paired with an uncollectable judgment or a decade-long timeline still produces a loss. The non-recourse structure means the funder's diligence effectively substitutes for the collateral a conventional lender would require, which is why commercial litigation finance underwriting is more merits-intensive and slower to close than comparable-sized asset-backed lending.