What is litigation funding?

Litigation funding (also known as litigation finance or third-party funding) is a mechanism by which an external party —such as Loopa— provides the necessary capital to cover the legal costs of a legal dispute or arbitration, in exchange for a percentage of the economic outcome if the case is successful. This model allows companies, individuals, or law firms to pursue a claim without having to bear the initial expenses or the financial risk associated with the process. In other words, the client pays nothing upfront, and the fund only recovers its investment if the case is won or a favorable settlement is reached. What does the funding cover? Funding can be applied to all litigation costs, such as attorney fees, court fees, expert expenses, arbitration costs, and more. In some cases, it can also be used to partially monetize the estimated value of the claim, allowing the client to access liquidity before the final outcome of the process. Who can access it? Both individuals and companies —as well as the legal firms representing them— can access litigation funding. At Loopa, we evaluate judicial or arbitral claims with a disputed amount exceeding 1 million dollars and solid legal grounds. What happens if the case is lost? One of the main benefits of this model is that the funding is "non-recourse": if the case is unsuccessful, the client is not required to repay the capital provided. All the risk is assumed by the fund, aligning the interests of both parties and allowing the claimant to move forward without compromising their own resources. Why choose litigation funding? Access to justice: It allows legitimate claims to move forward, even if the plaintiff lacks liquidity. Risk management: It transfers the cost and risk of the process to a specialized third party. Liquidity and strategy: In lengthy or complex litigations, accessing external funding frees up resources for other purposes and stregnthens the claimant's negotiating position. In summary, litigation funding is a strategic tool for those looking to advance a claim with professional support and without economic risk. At Loopa, we combine our own capital, in-depth legal analysis, and technology to carefully select cases for investment. Do you have a high-value litigation or arbitration and need financial support? Contact us: we can help you move forward without money being a barrier.