A Core Feature of the Modern Disputes Landscape

Third-party litigation funding is now an established feature of high-value commercial disputes.

When deployed appropriately, it can provide claimants with the financial means to pursue claims that would otherwise be unaffordable or commercially impractical.

Seladore Legal has deep experience working alongside litigation funders, and we routinely structure our engagements with funding arrangements in mind.

Expertise in Engaging with Litigation Funders

Our lawyers are well-versed in the commercial and strategic realities of funded litigation. We understand how funders operate, the risks they evaluate, and the criteria they apply when deciding whether to back a case.

Some of our partners serve as part-time judges or arbitrators and are regularly involved in assessing the kinds of disputes that attract credible funding. This gives us a strong sense of which cases are likely to be considered viable – and how best to present them.

We have acted in numerous funded matters and are adept at managing the additional layer of complexity that funding can introduce, including negotiations around term sheets, reporting requirements, control mechanisms, and priority arrangements.

We have, in addition, provided strategic advice to litigation funders in connection with some of their most significant investments, giving us an informed and balancedperspective of the commercial dynamics underpinning funded disputes.

A Range of Funding Models

We are familiar with the breadth of funding products currently available on the market. These include traditional third-party funding arrangements, where a funder pays the claimant’s legal fees and, in return, receives a portion of any recovery.

In addition, more innovative structures are emerging. These include models in which funders finance law firms directly – particularly where the firm is instructed under a damages-based agreement (DBA) – and arrangements under which a funder may negotiate a discounted fee with the law firm as part of the overall structure.

We also see products on the market with characteristics more akin to insurance, enabling funders to de-risk their positions or unlock further capital.

While we do not seek to endorse or promote any particular model, we have experience of working within a variety of frameworks and understand how different structures can influence the conduct and outcome of a dispute.

An Evolving Market

The litigation funding market remains in a state of flux.

The Supreme Court’s decision in PACCAR has had a material impact on the enforceability of many funding agreements – particularly those where the funder’s return is calculated as a percentage of damages recovered. In the immediate aftermath of the ruling, a number of funders paused new commitments, while others have moved to revise existing litigation funding agreements and reconsider the structures they are prepared to offer.

In response, the UK government has proposed the Litigation Funding Agreements (Enforceability) Bill, which is intended to restore the position that prevailed prior to PACCAR by confirming that typical litigation funding agreements do not fall within the definition of damages-based agreements. However, until the Bill is enacted – likely following the broader Civil Justice Council review – uncertainty will continue to affect the market.

Even with the prospect of legislative reform, many funders are adopting a more selective and measured approach. Greater scrutiny is being applied to claims, and commercial terms are, in some cases, becoming more conservative.

The availability of funding will depend not only on legal merits, but also on factors such as enforceability, duration, cost predictability, and prospects of recovery. In this context, informed engagement with funders and a clear understanding of market dynamics are essential.

Strategic Support from a Trusted Partner

Seladore Legal is committed to helping clients make informed, strategic use of litigation funding. We recognise the value it can offer, particularly in enabling access to justice and mitigating financial risk. Equally, we are clear-eyed about the complexities and potential pitfalls.

Whether advising claimants, law firms, or other stakeholders, we combine deep market knowledge with commercial acumen to ensure that funding supports, rather than distorts, the overall litigation strategy.

If you are considering litigation funding or would like advice on an existing arrangement, we are well placed to assist.