What is Third-Party Funding and When Is It Appropriate?

Category: Law

Explaining what is Third-Party Funding, the practicalities of securing it and the associated advantages and disadvantages. What is Third-Party Funding? Third-Party Funding, or Litigation Funding, is a mechanism by which a third party, independent of the claim, provides funds to a claimant to pursue a claim in arbitration or via the Courts. Typically, the funding will cover the funded party’s legal costs and expenses in pursuing a claim. The funder will also likely take out ‘After the Event’ (ATE) insurance to protect the funded party from paying the other side’s costs in the event they are not successful, or to provide security for the other side’s costs if the funded party is ordered to do so.