Do CPI underwriters require an independent legal opinion?

Almost always. Underwriters typically require a written opinion from senior counsel — independent of the funder's internal assessment — addressing prospects of success, key legal and factual risks, and quantum range. The opinion is the foundation of the underwriting decision and any subsequent claim adjustment.

How long does CPI underwriting take?

Bind times vary materially by complexity. A clean commercial breach claim with a strong evidence pack and counsel's opinion can bind in two to four weeks. Complex multi-jurisdiction or collective actions, or matters involving novel points of law, may take two to three months including supplementary opinions and broker negotiation.

Will an insurer cover a case the funder has already started funding?

Yes, in many cases. CPI can be placed at any stage of proceedings, though pricing and exclusions depend heavily on what has already happened in the case. Late-stage placement (for example, post-trial) may be possible but is usually narrowly scoped and carries higher premium.

CPI Underwriting & Due Diligence | What Insurers Assess

Key Takeaways

✓CPI underwriters assess case merit, legal team quality, jurisdiction risk and the funder's own due diligence
✓An independent legal opinion on prospects of success is usually a binding requirement
✓Funders with documented case-selection methodologies access better pricing and portfolio terms
✓Typical underwriting documentation includes pleadings, counsel's opinion, budget and the funding agreement
✓Bind times range from two weeks for clean commercial cases to several months for complex multi-jurisdiction matters

Understanding how capital protection insurance works is essential before exploring specialized funding options for specific practice areas.

What Insurers Assess

CPI underwriters assess case merit, the quality and track record of the legal team, jurisdictional and procedural risk, the funder's own due diligence and case-selection methodology, and the contractual structure of the funding facility itself. Pricing and binding decisions follow from this composite assessment.

Case Merit & Legal Opinion

Independent senior counsel's opinion on prospects of success is the foundation of the underwriting file. Insurers want a written, reasoned view addressing:

Probability of success on the substantive issues
Key legal and factual risks, including disclosure and witness risk
Quantum range and recovery prospects against the defendant
Procedural risks — limitation, jurisdiction challenges, security for costs

Legal Team Track Record

The quality of the instructed law firm and counsel is a primary risk factor. Insurers favour teams with demonstrable success in the relevant practice area and forum. Funder-side teams known to insurers — and with strong recovery histories — bind faster and at better rates.

Funder Case-Selection Methodology

Funders with a recognised, documented case-selection methodology — including merit scoring, quantum modelling, and post-mortem review of past cases — typically access better terms than ad-hoc underwriters. For institutional funders, the methodology itself becomes part of the underwriting story, particularly for portfolio-level placements.

Documents Insurers Typically Request

Statements of case (claim form, particulars, defence, reply)
Senior counsel's written opinion on merits and quantum
Litigation budget and cost forecast through to trial
Executed or near-final litigation funding agreement
Existing ATE policy or indication of cover (where relevant)
Funder's case-selection memorandum and merits scoring
Defendant covenant and enforceability analysis

Underwriting Timeline

Clean commercial cases: 2–4 weeks from broker submission to bind.
Complex commercial / arbitration: 4–8 weeks, often with supplementary opinions.
Collective / multi-jurisdiction matters: 8–12+ weeks, with phased binding possible.

Conclusion

Successful CPI placement is a function of preparation: clean documentation, a strong counsel's opinion, and a credible case-selection narrative. Funders that invest in their underwriting story access deeper capacity, better pricing, and more flexible structures. To begin a CPI placement, submit an enquiry or contact our team.

Frequently Asked Questions

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