How is the financing agreement structured?

At Loopa, we structure each operation clearly, securely, and efficiently, ensuring that all parties are aligned from the outset. The central instrument is the Litigation Funding Agreement (LFA), a framework contract that regulates the relationship between the fund and the funded party. This agreement is complemented by an assignment of litigation rights as collateral, which ensures the protection of both parties and establishes the terms of recovery. What is a Litigation Funding Agreement (LFA)? The LFA is the main contract that formalizes the fund's commitment to provide capital to finance one or more litigations or arbitrations. This document details: The funded amount and permitted uses (legal fees, court costs, expert expenses, etc.). The cases covered by the funding (can be a single case or a portfolio). The fund's participation in case of success, usually a percentage of the amount recovered. The obligations of the parties, including progress reports, confidentiality, and mutual cooperation. Early termination conditions and contract resolution scenarios. The goal of the LFA is to ensure transparency, predictability, and alignment of interests: the fund only recovers its investment if the case is successful, motivating both parties to seek the best possible outcome. What is the assignment of litigation rights as collateral? To protect the invested capital, Loopa usually requires an assignment of rights as collateral on the litigious credit. This does not imply that the fund takes control of the case or assumes its legal representation, but rather acquires an economic right subordinate to the success of the claim. In practice, this assignment: Allows the fund to recover its investment directly from the proceeds of the case in the event of success. Provides legal certainty over the funded right without altering the claimant's ownership of the claim. Is structured in accordance with applicable law, respecting the right to legal representation and the principle of non-subrogation in litigation. Who retains control of the case? In all instances, the legal strategy remains in the hands of the lawyer and their client. Loopa does not intervene in the legal direction of the process, nor does it have veto power over procedural decisions. Our role is financial: we provide capital, not control. In summary, the litigation funding agreement is formalized through a clear LFA and an assignment of rights as collateral, ensuring that both parties are aligned, protected, and focused on the success of the case. This structure is standard in the litigation finance industry and allows the entire process to unfold with legal certainty, professionalism, and predictability. Are you considering financing your litigation or that of your client? Contact us, and we will explain how we can structure it for your specific needs.