Part II: Influencing Funders
In Part I of this series, I shared observations from my vantage point as a litigation funder on what works when pitching to potential clients. In this Part II, I will share my views on how to best present your client’s case to a financier. It may seem that to obtain financing, you would present a funder with the best aspects of your client’s case, including the facts and law on their side. At a minimum, this is of course necessary, but there is more. Here are a few tips.
This is in part an overlap of the advice I gave for winning clients, which is to be honest about the warts in your client’s case. You should expect that a funder is going to figure out the weaknesses or holes in your case as the diligence process unfolds. It threatens your credibility and the funder’s perception of your competency if you fail to honestly discuss the negatives in your client’s case. What’s more, by affirmatively raising the issues, you also have an opportunity to show the funder your strategic thinking in discussing how these issues can be overcome.
The narrative of your client’s story is important: he was wronged and the adverse party is to blame because of its bad behavior. In order for a judge or jury (or funder) to adopt this narrative, it must comport with the norms of human behavior. We at Lake Whillans often ask about the supposed motives behind bad behavior in order to test their plausibility. Think about (and explain to the funder) what specific business incentives, structural deficiencies, ignorance or mistakes explain the wrongful conduct, especially where an otherwise reputable person or company is accused.
An important part of Lake Whillans’ diligence is to estimate the likely damages and support that number with sound analysis. Vague assertions by counsel or a claimholder that there are significant damages will not suffice. A better approach is to be able to answer questions like the following: How has the defendant’s conduct caused the damages sought? How will you substantiate those numbers? Is there a category of damages that is perhaps smaller, but more certain, which a funder can count on to protect all or some of its investment?
Lawyers in the trenches tend to think of the goal line as an award in their case. This is certainly a necessary focus while litigating, but a funder must also think about whether any award can be successfully enforced, and so too should a lawyer helping his client obtain funding. You should be prepared to discuss whether the adverse party has (and is likely to have when the award is made) sufficient assets in favorable jurisdictions to satisfy an award.
It’s the job of a funder to be skeptical. When a funder has raised concerns, it may behoove you and the client to do some work to overcome these concerns, whether they be related to the merits of the case, the damages or enforcement issues. The work can pay off: you may alleviate the concerns and get funding, and you may also have improved your own ability to litigate the weaknesses in your client’s case.
The best way to test out these tips is to contact Lake Whillans so we can collaboratively work towards getting the best result for your client!
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