Litigation Funding as Corporate Finance

Litigation is expensive, unpredictable and risky. While for many claimants it may be the only way to unlock a disputed asset or claim, the risks involved often mean businesses do not proceed with an action – even those that do have the necessary resources.

Litigation can also present a major accounting challenge for finance directors. Rules often require litigation costs to be expensed, reducing operating profits. Even if a claim is resolved successfully, the associated income is treated as a one-off item rather than operating income.

These factors combine to make litigation an unattractive option for many businesses, causing them to lose out on the potential value of the litigation asset.

Woodsford can help in both scenarios by delivering litigation funding as a Corporate Finance solution, through Risk Hedging or Positive Accounting. With these solutions, we take on the costs and risks burden of a litigation or arbitration, often in liaison with highly skilled claimant law firms. This approach gives the claimant huge potential advantages with minimal risk.

We can also help litigants manage the adverse accounting consequences of litigation. We pay the costs, avoiding drag on the profitability of the business. Our funding may allow the business to divert cash to other projects, assisting asset value. A successful litigation can then be viewed as both a positive cash and income event.

For more information contact:  Mitesh Modha