Know more about trademark litigation services in India

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An Extensive Perspective on Litigation
Financing Litigation Financing also referred to
as Third-Party Funding (TPF) is funding where a
third-party independently provides funds to other
parties for a dispute in exchange for a fraction
of monetary rewards that are recovered from the
proceedings. In this type of funding, the value
of legal claims is adjudged even before they can
be recovered before a court or tribunal. Most of
the time, the right to justice is impeded
because meritorious claims are delayed by high
costs of litigation. This type of funding helps
the parties to understand the full potential of
their claims and dissuade the long-drawn-out
litigation process too. And to know its actual
worth funders analyze the claims using different
methods. This funding gives a boost to the
parties to approach the best of legal talents and
not accept anything that is less than the worth
of their claims. Also, the funders can benefit
from this new asset class and can earn enormous
returns in comparison to other investment
options.
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Litigation Financing in India In India,
third-party litigation funding is legally
recognized. It is allowed under the Civil Code
of Procedure, 1908 in the states (Maharashtra,
Gujarat, Madhya Pradesh, and Uttar Pradesh) by
their respective state amendments to Order XXV
rules 1 and 3 of the Civil Procedure Code, 1908
(CPC). Therefore, in India, the authorization of
third-party funding can be illustrated from the
CPC. In India, Litigation Funding was recognized
from way back in the 18th century and has always
been allowed. The Privy Council in 1876 in
RamCoomar Coondoo v. Chando Canto Mookerjee
(1876-77) 4 IA 23 permitted third party funding
on the grounds of promoting access to
justice. The Supreme Court in Bar Council of
India v AK Balaji (2018) 5 SCC 379 observed,
"There appears to be no restriction on third
parties (non-lawyers) funding the litigation and
getting repaid after the outcome of the
litigation." But, India still needs to tap into
the potential of Third Party Funding as there are
many corporations that are looking at this
aspect seriously. And a proper case strategy can
help funders get attracted to the case.
Litigation Financing Possible Structures All the
dedicated financiers across the world are
fascinated by new business openings which are
the Litigation Funds while anticipating the
high-stake legal proceedings. Also, they support
the expenses of litigation while in return they
yield a return of the proceedings. Any disputes
that are associated with the following like
Commercial Contracts, Commercial Arbitration,
infrastructure, tortious claims like medical
malpractice and personal injury claims, antitrust
proceedings, insolvency proceedings that mainly
have an estimated chance of winning monetary
awards are being demonstrated. And when clients
suffer any kind of loss they also don't get
anything.
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At the same time, the Financiers investment seems
to be based on the reckoning of winning the
pecuniary awards. Therefore, the claimants to be
credited with a substantial settlement or award
(if they win), make the best recipient of the
Third Party Funding (TPF). And, the litigating
parties according to its case, advance the
funders for the flourishing boost up of the TPF
capital.

• The 3 schemes by which arrangement of TPF can be
  done
• Funders are allocated the claims by the party.
• The proceeds of the claims are allocated to the
  funders by the party.
• Where the funder is a beneficiary, the party
  could direct the claim in the trust right there.
• In India, there are many infrastructure companies
  that struggle with stressed assets and massive
  imminent claims. And setting an example in
  litigation funding, there was the case of Patel
  Engineering. Similarly, the HCC and Era Infra
  Engineering were also looking for litigation
  funding.
• HCC is the one that is always involved in
  long-drawn arbitrations with government entities
  and public sector utilities such as the National
  Highways Authority of India (NHAI) and the
  National Thermal Power Corporation Limited
  (NTPC). With that, HCC declared that it shall be
  conveying all its beneficial interests and
  rights in a pool of claims and arbitration
  awards, amounting to a value of roughly Rs 2,000
  crore, to an SPV controlled by a consortium of
  funders led by Black Rock, so as to tone down the
  resulting damage placed on its finances. And,
  HCC will receive Rs 1,750 crore as a concern for
  this assignment from this consortium.
• The type of the transaction is in the form of a
  contingent contract where the profits are
  dependent on the allotted claims and that too
  irrespective of the participation of the
  entities. The only backdrop is the thing that if
  the party loses, there shall be no return in the
  investment. Along with that, due to the
  financial distress of the company, it might
  happen that the funder may not obtain any
  compensation.

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And, as it seems indifferent to arrange the
transaction as a loan as the litigant who lost
may have a duty to repay the entire invested
amount. But, at this point when the claims are
already fixed, and a debt involves interest rate
and also a maturity period.
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The Funder's Focus When assessing a claimant-side
of litigation funding prospects, the funder
generally focuses on the following six essential
criteria 1. Merits of the Claim It says that
the scope of the funder's review will be
dependent on the type of case, the complications
of the concerning issues, the significance of the
action, the set-up of the diligence materials,
and at the end the litigation counsel's
capability to concisely articulate its case.
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• Claimant
• The funder along with analyzing the merits of the
  case will also assess the claimant.
• Claimant's Legal Representation
• The experience of the legal team working on the
  case along with the engagement agreement with
  the claimant should be reviewed by the funder to
  understand the economics of the plan and
  calculate if the interests of the claimant.
• Litigation Budget
• In relation to the litigation, the Litigation
  funding offers a preset commitment of capital to
  pay for fees and expenses.
• Expected Damages
• The size of a potential award should be enough to
  give the funder a return to equal the investment
  risk and overcome the charge of running the
  chances through the funder's meticulous
  diligence and transactional practice.
• Respondents and Recovery
• When litigation that sails through the trial
  while concluding with a successful verdict, and
  also has an attractive judgment, but at the end,
  the recovery cannot be proceeded with as the
  respondent is insolvent or judgment-proof, that
  is the worst-case scenario for a funder.
• Quicker Solutions
• Funders want to be invested in quick and not in a
  prolonged legal battle as it increases the
  uncertainty factor and also impedes their chances
  of earning costs.

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Key takeaways Litigation Financing, also known as
Third-Party Funding (TPF) is an interesting
concept that is practiced globally. In India, it
is not prohibited, still, there is a need for a
dedicated regulation that can govern TPF. Many
litigants and banking financial services
consulting in India don't have access to justice
just because of a lack of funds. And the question
here that needs to be considered is whether the
funders will be keen on investing in such cases
or they would be eyeing on major projects. Well,
everything depends on the stake and merits of
the case. And in India, this is an ever-expanding
market where principles of justice are not
defeated at any cost should be the priority
concern. Also, there is a confidentiality issue
that can be tackled by drafting contractual
clauses carefully. But, TPF is growing
eventually, and very soon it will take the form
of a structured system that will be used in
benefitting both the funders and the party in a
systematic way. And here we are assuring you The
Right Lawyers for any of your Litigation
Financing or Third-Party Funding claims. Our team
of experienced attorneys that make all the
Intellectual property legal solutions promises
you the best legal advice for any of your
problems. We are located in the 6 major cities in
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for the best results.