Common reasons Litigation Funding gets refused
The vast majority of applications for funding are refused by the funders. The reasons for refusing to advance a case often relate to a few common criteria.
Weak Prospects of Success
The merits review considers the Prospects of Success of a case on the evidence before the funder. Typically the funder will look for a case with a Merits rating of 60%+ or better. The review considers the evidence, the legal merit of the case and how the case is likely to be viewed by civil courts. Cases with marginal liability are unlikely to get funded.
The Damages Are Too Small
The award of damages from a successful claim must cover the costs of the funding, as well as generate a return for the funder, typically in the region of 20-30%. Funding is therefore generally provided for claims of £100,000 or more.
The Defendant Cannot Pay
The defendant is insolvent, has gone into liquidation or has been dissolved and the award cannot be enforced against them.
Deadlines Have Already Passed
Cases that have already passed critical deadlines (e.g. limitation periods) are unlikely to be funded as there will be a strong risk that the case will not succeed due to procedural defects having already occurred.
Incomplete or Unverifiable Documentation
Applications for funding that are supported by thin documentation, such as a few loose papers including missing contracts, are easily dismissed by the funding community. Funding applications are assessed quickly and effectively if a claim is well documented and includes signed copies of contracts and other relevant documents together with a clear explanation of losses and a concise chronological summary of events.
Addressing these issues prior to an initial assessment will increase the likelihood of your case progressing.