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What is third-party litigation funding and how does it work?

Third-Party Litigation Funding is a financial arrangement where an outside party provides funds to cover legal costs in exchange for a portion of the settlement or judgment. This funding option helps plaintiffs, law firms, or businesses pursue strong legal claims without bearing the high upfront expenses of litigation. The process begins when a funder evaluates the merits of a case, the potential damages, and the likelihood of success. If approved, the funder pays for legal fees, expert witnesses, and other case-related costs. Importantly, repayment is only required if the case is successful, making it a non-recourse investment. Third-Party Litigation Funding allows individuals and companies to access justice, reduce financial risk, and focus on their legal strategy, while funders benefit by sharing in potential case proceeds.