Return Multiple

A return multiple in litigation finance specifies the funder's recovery as a defined multiple of the capital deployed — for example, 2.5x or 3x the funded amount — rather than a percentage of the total judgment or settlement. Return multiples are common in shorter-duration cases or where the funder wants predictable return economics regardless of recovery size. The choice between a multiple structure and a percentage-of-recovery structure significantly affects alignment between funder and claimant: a multiple caps the funder's upside on very large recoveries while protecting claimant economics, whereas a percentage-of-recovery structure scales with outcome size. Blended structures using a floor (multiple) and a cap or transition to percentage above a threshold recovery amount are increasingly common in sophisticated deals.

Funders choose a return-multiple structure over a percentage-of-recovery structure specifically when they want predictable economics on shorter-duration or lower-variance cases, accepting a capped upside on very large recoveries in exchange for protecting claimant economics and closing the deal faster. Blended structures — a multiple floor with a percentage-of-recovery kicker above a threshold — are increasingly the negotiated middle ground, and funders model both scenarios before settling on final terms.