Getting into a legal battle can be incredibly hard on the pocketbook for a business owner. But those battles can also be quite lucrative and that's why some investors are choosing to fund litigation in hopes of sharing in the possible proceeds. Some business owners in Canada find it difficult to pay for expensive lawsuits, but there are some investors who will wager on commercial litigation cases like those regarding patents and trademarks or contract disputes and will step up to the plate to foot the bill.
With the promise of making a pretty penny, litigation funding in Canada has been increasing in popularity. There are also litigation funder companies in existence, which the courts began to allow in 2015 under the stipulation that litigation funders avoid creating an environment that could incite litigation. Litigation funders will give advances for legal fees, and pay various other costs when the case is successful.
This is not a lending situation, but rather an investment without recourse, which makes it totally different from a conventional loan. Funders will look at each litigation situation individually and measure it by their own yardstick for possible success or failure. For instance, the possible financial returns have to be greater than the risks and time, so some companies won't even entertain a funding proposal that's less than $500,000. And the company asking for that help has to throw in some of its own cash as well.
There is so much to know about the world of commercial litigation and what can happen in its realm. A lawyer in Canada can enlighten clients on the dynamics of the process. He or she can explain those areas which are complicated such as how commercial litigation funding works and whether it may be an option for a client.