What Makes a Strong Litigation Funding Case? Essential Fundability Criteria

Understanding what makes a case "fundable" helps you position your claim effectively and set realistic expectations. While every funder has slightly different criteria, strong cases share common characteristics across five key dimensions.

1. Legal Merits: How Strong Is Your Case?

Funders begin by assessing the likelihood you will prevail on liability and quantum. Most funders seek cases with 60-70%+ probability of success, though this threshold varies by case type and potential return.

Funders don't expect certainty—litigation is inherently uncertain. But they want cases where the balance of probabilities clearly favors the claimant. A detailed legal opinion from experienced counsel dramatically improves fundability.

2. Quantum: Is the Potential Recovery Large Enough?

Even with strong merits, cases must have sufficient quantum (potential damages) to justify funding economics. After legal costs, funder returns, and any ATE insurance premiums, there must be meaningful net proceeds for you.

Quantum isn't just about the headline claim value—it's about provable, recoverable damages. Funders heavily discount speculative or consequential damages that may not survive scrutiny at trial.

3. Defendant Solvency: Can They Pay?

Winning a judgment against an insolvent defendant is pyrrhic. Funders meticulously assessdefendant solvency and assets to ensure any judgment can actually be satisfied.

Funders will commission solvency reports from forensic accountants or investigators if defendant financial position is unclear. Strong cases have defendants with transparent, verifiable solvency materially exceeding the claim value.

4. Enforceability: Can You Collect the Judgment?

Closely related to solvency is enforceability—the practical ability to collect a judgment once obtained. This involves both jurisdiction and asset location.

• Domestic enforcement (England & Wales): Generally straightforward. Courts have robust mechanisms for enforcement including charging orders, third-party debt orders, and winding-up petitions.
• Cross-border enforcement (within EU/UK treaties): Relatively reliable under Brussels Recast, Lugano, or bilateral treaties, though may add 6-12 months.
• International enforcement (non-treaty jurisdictions): Can be complex, expensive, and uncertain. Some jurisdictions (US, Canada, Australia) have reciprocal enforcement. Others require re-litigation of merits.
• Arbitral awards: Often easier to enforce internationally under New York Convention, but still requires recognition proceedings in enforcement jurisdiction.

The strongest cases have defendants with substantial, identifiable assets in England & Wales or reciprocal enforcement jurisdictions. Cases requiring enforcement in Russia, China, or Middle Eastern jurisdictions without treaty recognition face additional hurdles.

5. Case Duration: How Long to Resolution?

Funders deploy capital for extended periods and want to understand expected timeline to resolution. Faster cases tie up capital for less time and generate better returns.

Cases already in progress (with pleadings closed, disclosure complete, experts instructed) may be more attractive than early-stage cases because key risks are known and trial is nearer. Conversely, cases likely to stall on procedural issues or require multiple appeals are less attractive.

Beyond the Five Pillars: Additional Considerations

While the five pillars are fundamental, funders also consider:

• Legal team quality: Experienced solicitors and counsel with track records in your dispute type significantly improve fundability. Funders want competent professionals handling the case.
• Claimant credibility: Your reputation, financial stability, and willingness to cooperate with funder diligence matter. Funders want reliable, transparent partners.
• Adverse costs risk: High-value cases often require ATE insurance to cap downside. Insurable adverse costs make cases more fundable.
• Costs budgeting: Detailed, realistic cost budgets inspire confidence. Vague or wildly optimistic budgets raise red flags.
• Strategic value: Some cases have reputational or precedent value beyond monetary recovery, making them attractive despite borderline economics.
• Portfolio fit: Funders managing diversified portfolios may fund cases that complement existing investments or fill gaps in sectoral coverage.

What if my case is marginal on some criteria?

Few cases are perfect across all dimensions. Funders assess cases holistically. Weaknesses in one area can be offset by strengths elsewhere:

• Lower merits but huge quantum: A 50% probability case with £50M recovery potential may be fundable because the risk-adjusted return justifies the lower win probability.
• Strong merits but modest quantum: Can work if case is part of a portfolio (multiple similar cases funded together) or if costs are very low.
• Protracted timeline but strong fundamentals: Long-duration cases are fundable if merits, quantum, and solvency are all excellent—funders will simply require higher returns to compensate for extended capital deployment.
• Enforcement challenges but solvent defendant with reachable assets: If assets are clearly identified (even in non-treaty jurisdictions), funders may underwrite enforcement costs.

The key is transparency. Present your case accurately, highlight strengths, acknowledge weaknesses, and explain mitigations. Advisors like Audley Capital help position cases optimally to maximize fundability despite imperfections.