What is a litigation loan?

A litigation loan is money borrowed to pay for the costs of a legal case — legal fees, disbursements or living costs while a claim is ongoing. Like any loan, it is usually recourse: it has to be repaid with interest whether or not the case succeeds. That is the key difference from non-recourse litigation funding.

Is a litigation loan the same as litigation funding?

No. A litigation loan is borrowing that must be repaid regardless of the outcome, and interest accrues over time. Litigation funding is non-recourse: the funder is only repaid from a successful recovery, and if the case fails the claimant owes the funder nothing. The two are often confused because both provide money to pursue a claim.

Which is cheaper — a litigation loan or litigation funding?

It depends on the case. A loan may carry a lower headline rate but must be repaid even if you lose, and interest compounds the longer the case runs. Funding costs more as a share of a win, but it transfers the downside risk to the funder. The right choice depends on the strength of the claim, its likely duration and your appetite for risk.

Do I have to repay a litigation loan if I lose my case?

Usually yes. Most litigation loans are recourse borrowing, so the debt and accrued interest remain payable even if the claim fails. Always check the specific terms. With non-recourse litigation funding, by contrast, you owe the funder nothing if the case is unsuccessful.

How do I decide between a loan and funding?

Consider how confident you are in the claim, how long it may take, and whether you could afford to repay a loan if you lost. Strong, higher-value commercial claims are often better suited to non-recourse funding, which removes the downside. It is sensible to take independent legal and financial advice before committing.

Claimant Guide

Litigation Loans vs Litigation Funding

They sound similar and both pay for a case — but one is a debt you always repay, and the other is not. Here is the difference, in plain English.

A litigation loan is money borrowed to pay for a legal case. Like any loan it is usually recourse: it must be repaid with interest whether or not the case succeeds. Litigation funding is different — it is non-recourse, meaning the funder is only repaid out of a successful recovery, and if the case fails the claimant owes the funder nothing. The trade-off is that funding costs more as a share of a win, because the funder takes on the downside risk. This page is general information, not financial or legal advice.

Litigation loan vs litigation funding: the key differences

Feature	Litigation loan	Litigation funding
If you lose	Loan + interest still repayable	You owe the funder nothing
Recourse	Recourse (personal liability)	Non-recourse
Cost basis	Interest, accruing over time	Agreed share of any recovery
Who carries case risk	The borrower (you)	The funder
Best suited to	Short, near-certain needs; bridging	Strong, higher-value claims where you want the downside removed

Types of litigation loan

Disbursement funding — borrowing to cover case expenses such as court fees, expert reports and counsel's fees, often used alongside a "no win, no fee" arrangement with a solicitor.
Consumer legal loans — personal borrowing to cover living costs while a claim is ongoing, more common in personal-injury contexts.
Law-firm lending — facilities that lend to a law firm against its book of cases; for the firm-side alternative see portfolio litigation funding.

Which is right for your claim?

A loan can make sense for a short, low-risk need — for example, bridging a defined cost you are confident of recovering quickly. But because a loan must be repaid whatever happens, and interest accrues the longer a case runs, the risk sits with you.

For strong, higher-value commercial claims — where the case may take years and the downside of losing would be painful — non-recourse litigation funding is often the better fit, because it transfers that downside to the funder. Use our guides to check whether a claim is likely to qualify: single-case funding and is my claim suitable?

Litigation outcomes are never guaranteed, and any funding or borrowing decision should follow independent legal and financial advice.

Frequently asked questions

Litigation funding overview Single-case litigation funding Litigation funding costs Litigation finance glossary

Want funding without the downside?

Audley Capital arranges non-recourse litigation funding — if your case fails, you owe the funder nothing. Submit your case for a free, confidential assessment. Capital is at risk for funders and no outcome is guaranteed.

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