Course Catalog

This course on litigation finance will be particularly interesting for students who intend to work in dispute resolution, as inhouse lawyers, or in the litigation finance industry itself, which offers interesting careers at the intersection of law and finance. Litigation finance refers to the use of financial instruments to fund the costs of and transfer the risks inherent in litigation and arbitration. The most prominent of these financial instruments is third-party litigation funding (TPLF). In this practice, a specialized litigation finance provider pays the costs of a party in a lawsuit. If the case is successful, the funder receives a share of the recovered sums. If the case is lost, the funder does not receive anything and loses its investment. This way, the funder invests in litigation similar to a venture capital fund that invests in start-up companies. For claimholders, this means they have to bear neither cost nor adverse cost risk; they pay a success fee only if the case is won. As a result, they can enforce their rights where they would otherwise not have had the money or the risk-bearing capacity to do so. Thereby, TPLF can improve access to justice and serve as a risk and liquidity management tool for businesses involved in lawsuits. In addition, several insurance instruments have been developed and deployed to transfer the risks of legal disputes. In recent years, litigation finance has evolved into a global, multi-billion-dollar industry and has come to play a key role in a wide range of legal disputes, such as high-value commercial disputes, IP disputes, class actions, international commercial and investment arbitration, insolvency cases, or even family and inheritance disputes. Courts and legislators in various countries have noticed this trend and are developing doctrines and regulatory approaches to promote the benefits and mitigate the risks of this growing practice. This course provides an introduction to litigation finance from a legal, economic, and comparative perspective.