West Palm Beach - FL / - The effect of quarantining has had an adverse impact on the Nation’s economy. Unfortunately, this impact could be moderate to severe and may possibly lead to the worst financial and economic crisis ever. The economic downturn as a result of the pandemic fallout, has even reached the legal industry. Millions of legal professionals have been impacted by the COVID-19 economic crisis.
Requirement for Litigation Funding
Like any other business it’s clear attorneys would want to protect their livelihoods and insure the survival of their law firms by seeking to preserve their cash flow in these times. So, it’s no wonder they may be trying to discover creative ways to achieve this, by looking for new sources of capital.
Here comes litigation financing or litigation funding into the picture to help law firms and litigants. The requirement for litigation financing and its expansion during this pandemic situation is huge and quite useful for the legal world to meet the demands of lawyers and their clients.
As per Bruce Jones [1] Minnesota Supreme Court’s Abolishment of Century-Old Common-Law Prohibition Against Champerty Paves Way for Third-Party Litigation Financing,
Although Litigation Finance was prevalent in the US for more than 2 decades, there were several states that had laws banning the practice. However a recent unanimous decision by the Minnesota Supreme Court, abolished Minnesota’s common-law prohibition against champerty and maintenance, allowing Minnesota to join the rest of the country in allowing third-party litigation financing.
For the less practiced, the Old English term of champerty is “an agreement to divide litigation proceeds between the owner of the litigated claim and a party unrelated to the lawsuit who supports or helps enforce the claim” and maintenance is “improper assistance in prosecuting or defending a lawsuit given to a litigant by someone who has no bona fide interest in the case, meddling in someone else’s litigation.”
How Litigation Funding Can Help Law Firms During COVID-19
It is essential for lawyers and litigants to have adequate funding in place in order to file suit and manage the cost and expenses for a variety of litigation cases. Especially, litigants should make sure they have enough funds to pay court fees, appoint a lawyer and bear other expenses that are required to move forward on the case. At the same time they have to focus on their business recovery.
Attorneys need strong financial support to meet the client requirement, retain new clients, cover the office expenses and expand their practice without financial hassles. And often claimants need help covering litigation costs and expenses for services like, e-discovery/ ESI, where data has to be assessed, managed and hosted, have document analysis teams manage the reviewing of sometimes 100’s of thousands of documents and hire experts to create financial damage models.
Having the resources to help with litigation expenses and costs becomes critical. Lawyers who can provide the financing for these services will distinguish themselves from their brethren. Also, it may mean the difference of whether a suit moves forward or never gets litigated in the first place. Having the necessary litigation funding in place would help the lawyers expand their practice and help their litigants manage their costs.
Today, litigation funding has evolved and is being used in a variety of different ways. There are some instances when service providers for both plaintiffs and defendants can align themselves with corporations who provide litigation support services, by either deferring payment to the end, win or lose or based on the success of the case or success based funding. This can be done either directly with the plaintiff or through their representative attorneys, by having these entities share the cost and risk of litigating these expensive and complex criminal and civil litigation cases. These new financing models are allowing future litigation the opportunity to move forward either by deferring payment or through contingency financing.
As per Rene Perras [2] How Does Discovery Work in A Complex Litigation Case? How Law Firms Can Use E-Discovery Expenses To Operate Efficiently?
What is e-Discovery or ESI?
Today paper and manila folders have been replaced with some form of an electronically stored information (ESI) unit. These new motions for discovery or evidentiary requests are now defined as e-Discovery or ESI. All types of storage devices are now being used.
What hasn’t changed in complex litigation is how to find the proof to get to the truth. In the new digital world when data continues to grow exponentially driving up case expenses. The ability to sort, process and most importantly authenticate the provenance of data in an organized manner is paramount. E-Discovery, when managed by technology specialists and software athletes, whose expertise is managed document review, can reduce the stress of high stakes complex litigation. Well-crafted storytelling is derived from e-discovery, utilizing a best practice approach, will develop the trial strategy necessary to create all future arguments, motions, and depositions ensuring a robust and comprehensive trial preparedness, proving beyond a reasonable doubt the merits of your case.
Litigation Financial Providers Can Help
Reputed litigation financial providers are capable of deploying funding into the market even in the midst of a pandemic to help law firms and litigants. Litigation funding would help the legal world receive the sufficient funds to support law firms and their respective claimants. This will help the legal world recover faster from the economic crisis, helps law firms and claimants protect themselves and insure the survival of their assets.
Rene Perras ~ Legal Authority Advisory
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Published by: Rene Perras