Litigation Budget

A detailed projection of the total legal costs and disbursements expected to be incurred from case initiation through trial or settlement, prepared by counsel and reviewed by the funder as part of the funding agreement. A well-constructed litigation budget distinguishes between committed costs, discretionary spend, and contingency reserves across each phase of the case, enabling the funder to manage capital deployment and monitor progress against milestones. Budget overruns are a common source of friction in funded matters and typically trigger renegotiation of funding terms or require the claimant to contribute additional capital. Funders frequently impose budget approval rights as a contractual condition and conduct periodic reviews tied to case developments.

A litigation budget is the primary tool funders use to monitor capital deployment against case progress, and funders typically require variance reporting at each phase transition so that an overrun is caught before it compounds. Because budget overruns are the most common source of friction between funders and claimants, sophisticated funding agreements build in a contingency reserve up front rather than treating every overrun as a renegotiation event.