What To Know About Litigation And Litigation Financing

by Editor
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At some point in time, disagreements between two parties can be inevitable. Legal disputes aren’t the most pleasant thing for any individual to experience, no matter which side you’re on, but when you’re faced with no other choice, pursuing legal options can solve your disputes in a well structured and transparent way.

This process is called litigation, and there are numerous steps involved in this process – from the start of the legal proceedings all the way to when it gets to trial in the courtroom. There are certain rules and regulations related parties in the proceedings have to follow, and several tasks they must do during the litigation process. They must also familiarise themselves with court procedure and finally, learn how to manage their money when in the process of legal proceedings by using the services of their legal advisers in an efficient and cost effective way.

What is litigation?

Litigation, by definition, is the process of taking legal action. Parties who wish to pursue litigation often end up in the courtroom to fight their case in the presence of a judge and other members of law enforcement. Whenever a person begins a lawsuit, he or she enters into the process called litigation.

How does litigation work?

There are mainly 5 steps in the litigation process: Complaint, Discovery, Motion, Trial, and Appeal. Let’s explore each one of these steps in more detail.

  1. Complaint

Sometimes during a dispute, the parties involved decide that they realistically cannot reach a mutual agreement. This is when both parties secure legal help in the form of litigation lawyers. The “complaint” in this sense basically means a legal document that is filed with the court, that includes all details of the parties involved, the nature of the dispute, the legal claims and specific damages incurred. Then, a demand letter is sent to the other party that outlines what the receiver of the letter must do to avoid any further legal action.

The recipient of the demand letter must respond within a certain period of time – either with an admittance or denial of the statements made in the complaint, filing a counterclaim, or file a motion to dismiss the case even before it moves to the next step if the recipient believes the lawsuit has no legal standing.

Consulting lawyer on litigation
Consulting lawyer
  1. Discovery

When both parties agree to escalate the legal process, the discovery phase is set in motion. This basically represents the exchange of information between the two parties, accumulating facts, evidence and all necessary documentation related to the case at hand. During this formal process, strict deadlines have to be followed when gathering information to be used in the court. If deadlines are not kept, the lawyer in question risks losing the right to legally use evidence and any facts during the trial process when defending his or her client.

During this process, depositions (which means formal interviews of both parties in the same room) are arranged and are conducted under oath. They are also professionally transcribed in order to have full documentation of the facts laid out during the deposition.

  1. Motion

Motions are filed by attorneys to petition the court to allow for things like extensions to the trial date, giving them more time during the discovery phase to gather more facts and evidence to be used in trial.

  1. Trial

Once the dispute reaches the trial phase, the courtroom becomes the showdown between both parties and their legal representatives. At this point, the costs are more than likely to have added up to a hefty sum – this is why sometimes lawsuits are settled even before they get to trial (this is called an out-of-court settlement) as it may be more ideal for both parties as the length of trials are uncertain and can be expensive. Some parties at this point may take out loans on lawsuit funding if necessary.

During the trial phase, the lawyers can state their case, fight for their client’s claims, and defend their client, but the ultimate decision will be made by a judge or jury. This is done by bringing forward sufficient evidence, witnesses, and cross-examinations in order to prove either side’s case.

As the trial draws to a close after several weeks (or even months) and lawyers from both sides deliver their closing arguments, a deliberation period is granted to the jury or the judge to deliver the verdict.

  1. Appeal

The appeal stage caters to the losing party, who still has the right to appeal the decision to a higher court. In this case, the higher court reviews all facts, evidence and arguments presented during the previous trial, with a focus on looking for any form of legal error that may have occurred during the trial.

If a legal error was found, the higher court judge has the authority to reverse the previous verdict. This opens up a new trial for both parties, and the process repeats itself again.

Litigation financing

So, through the above process that outlines what goes on during litigation from start to finish, it’s clear to see that the entire process takes a fair bit of time and a significant amount of money. For those who can’t afford to embark on a prolonged lawsuit and litigation process – litigation financing is the answer.


Sometimes, some disputes are just too important to be lost. The law is designed to protect and defend those who seek legal recourse, however, the reality is that sometimes there just isn’t enough to pay for the entire process, which involves many professionals who bill by the hour, and this can be slow and a constant drain on the finances.

With litigation financing, a specialist funder finances part or all of the legal fees of a claimant involved in a legal dispute, in exchange for an agreed share of the damages received post-trial. This gives the claimant the necessary leverage to push the case through trial and into a verdict, whereby if the claimant is proven to be right and wins the case, everybody wins as well.

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