Stonward Litigation Funding emerges in Spain to offer bespoke solutions to finance commercial disputes in both Europe and the Americas. With a clear vocation to serve clients as a strategic ally, we procure funding to match claims or legal needs with the right third party funder.
We arrive at a key moment when an avalanche of global commercial disputes caused by Covid19 are expected due to breach of contract by States and corporations, or increased financial and organizational pressures, for example.
Third party litigation funding, increasingly present in Spain, is a legal tool that allows an external party to a judicial or arbitration procedure to pay its fees and expenses in exchange for a previously agreed portion of the recovery. Given its non-recourse nature, the funder does not recover the money invested should the claim be unsuccessful.
“It is known that justice is not cheap, especially when we talk about large and complex disputes, such as investment arbitrations, cross-border commercial disputes or class actions resulting from competition law infringements. But a lack of financial resources should never mean an inability to access justice”, explains Carolina Bayo, Senior Director and Head of Legal Assets.
Our funding solutions come from the largest and smallest investment funds; from the most well-known third party funders to those with a lower profile in the market. “But if they have something in common it is that all of them have an appetite for cases with strong legal merits”, says Bayo.
Litigation funding means to maximize the value of legal assets of businesses or law firms -from claims, portfolios of cases, to monetization of awards or judgments- and alleviate financial risk. “It is not just an option for insolvent claimants – explains Bayo-; many times, a claimant is solvent and chooses not to empty its coffers in procedures that can last years, and reinvest those funds in the business and face other expenses that will generate profit in the nearer future. It also allows law firms to work on cases without having to put forth their own resources”. The solutions are multiple.
At Stonward, we are working on investment operations in commercial litigation and international commercial and investment arbitration in multiple jurisdictions and before different arbitral institutions.
How our process works:
Stonward receives a request from a client to access the litigation funding market to cover the costs related to a claim, a portfolio of cases, a practice at a law firm, the monetization of awards or judgements, etc. We discuss financing lawyer’s fees, experts, and other related costs.
The exchange of information between Stonward and the client is done under strict confidentiality, and once all the necessary information has been collected, Stonward studies the case’s merits and probability of success. If the case has strong merits, a high probability of success, and a strong likelihood of being funded, we execute an engagement letter that includes the success fee for our bespoke services. We also may provide funding on a case by case basis.
According to the characteristics of the case, we begin the process of contacting third party funders, to whom the case is presented and explained. The litigation funder presents the financial terms and conditions under which they would fund the case, conditional upon the successful completion of their due diligence. “Prior to being financed, a case has undergone at least three legal analyses: The first by the lawyers on the case, the second by Stonward, and the third by the funder and their legal team”, explains Bayo.
If our client accepts the funder’s terms, a Litigation Funding Agreement is signed, which gives way to a process of close monitoring by Stonward until the case is successfully concluded and damages enforced.