Litigation Funding in ADGM: 2026 Guide

What are the ADGM Courts?

ADGM is Abu Dhabi’s international financial centre with a common-law court system. A party considering funding must first establish that the ADGM Courts have jurisdiction over the dispute. The location of a business or asset in Abu Dhabi does not by itself answer that question.

Review the contract, jurisdiction clauses, parties and relief sought with qualified counsel. Commercial funding may be relevant to contract, finance, shareholder or enforcement disputes, but the correct forum and the collectability of the claim remain separate questions. A clear forum choice also helps identify the procedural rules and budget.

Which funding rules apply?

The ADGM Litigation Funding Rules 2019 apply to litigation funding agreements as defined in section 225(2) of the ADGM Courts Regulations. They address funder requirements, legal advice, financial liabilities, conflicts, settlement involvement, termination, confidentiality, dealings with lawyers, notifications and costs jurisdiction.

The official ADGM legislation page also lists Amendment No. 1 of 2023. That amendment changes rule 7(d) by replacing a reference to section 225(3)(e) with “under the Agreement”. Read the rules with amendments rather than relying on an unqualified copy of the original 2019 text.

What should the written agreement explain?

The funding agreement should document the budget, what costs are included, the funder’s return and the distribution of proceeds. Counsel should assess the statutory framework and required agreement content, including the parties’ financial liabilities and any provisions dealing with settlement or termination.

Written terms make it possible to compare an early settlement with a delayed recovery or loss. Counsel should apply the written-agreement and independent-advice requirements under the current consolidated ADGM framework. This guide is not a template agreement and does not state that a particular structure satisfies those requirements.

What should I ask about disclosure and funder resources?

ADGM’s rules address notifications and funder requirements. Ask counsel what must be notified, to whom and at which stage. A confidentiality clause cannot override a court duty or an applicable order; avoid promising that the existence of funding will always remain private.

Assess whether the funder has resources available for the entire committed budget and any assumed financial liabilities. Counsel should assess applicable capital-adequacy requirements, exceptions and evidence under ADGM’s current funder rules. Do not treat a marketing statement about assets under management as proof that money is committed to your case.

How does ADGM compare with DIFC?

Both forums have express funding-related frameworks but their instruments and requirements are not interchangeable. ADGM uses the Courts Regulations and Litigation Funding Rules; DIFC proceedings are addressed by the DIFC court framework including Practice Direction No. 2 of 2017.

The comparison below identifies review topics, not equivalent legal tests. Counsel should check current provisions in the actual forum. Enforcement planning also differs according to where the debtor’s assets are held; the issuing forum alone does not determine collection success.

How does a funder assess the economics?

A funder compares the likely recoverable amount with the full cost of reaching and collecting that recovery. Start with a defensible valuation of the claim, a staged legal budget and an account of the defendant’s assets. The amount pleaded is not necessarily the amount a court or tribunal will award, and an award is not necessarily money that can be collected.

Dubai Legal Funding typically considers claims of USD 2 million and above, with budgets from USD 250,000 to USD 5 million per matter. Claim value at least 8–10 times the required budget is one consideration, not a guaranteed approval formula. Strong evidence, experienced counsel and a solvent defendant with reachable assets remain essential.

Compare full trial, early settlement and delayed enforcement scenarios. Interest, exchange rates, tax, appeals and third-party costs can affect the economics. Ask which costs are included, what happens if the budget is exhausted and how additional spending changes the funder’s entitlement. An apparently attractive headline multiple can conceal a less favourable distribution after deductions.

Who controls the case and confidential information?

The claimant and their lawyers retain responsibility for strategy and legal advice. A funding agreement may require reporting, consultation about settlement and approval of extra-budget spending. Those provisions should be understood rather than equating funding with either complete control by the funder or an agreement without ongoing obligations.

Before sharing documents, complete a conflict check and agree an NDA. Counsel should assess privilege and applicable disclosure rules; confidentiality in a commercial contract does not necessarily preserve litigation privilege. Begin with a non-privileged summary, then use a proportionate document list and appropriate secure sharing arrangements.

Independent legal advice on the agreement should cover settlement disagreements, termination, changes in merits, adverse costs, access to information and any contractual dispute-resolution mechanism. Identify who pays committed expenses if the agreement ends. Do not assume that a non-recourse description answers every question about breach, third-party liabilities or an unfunded appeal.

What happens between screening and funding?

The screening form takes approximately two minutes. A confidential initial response is provided within 3–5 business days under NDA; that response is not final approval. Due diligence typically takes 3–6 weeks depending on complexity and document availability. A term sheet follows within 1–2 weeks after completing diligence, with agreement execution and first-tranche release after that.

Provide a chronology, core contracts, the legal basis of the claim, principal defences, a reasoned loss estimate, counsel’s staged budget and asset information. Distinguish confirmed facts from assumptions. If a limitation period, preservation obligation or freezing application is urgent, seek legal advice immediately rather than waiting for finance.

Urgent matters can be fast-tracked where possible, but no accelerated decision or court outcome is promised. Conditions in a term sheet should be checked against the deadline and the actual date on which funds can be used. Funding remains subject to review and a signed agreement, not an informal indication of interest.

How should proceeds and downside scenarios be modelled?

Common market references include 2–4x deployed capital or 20–40% of net recoveries, or the greater of the two, sometimes increasing over time. These are general references, not a rate quoted by Dubai Legal Funding. The agreement must define deployed capital, net recovery, priorities, timing and any ratchets or caps.

Illustrative only — not an offer: collecting USD 10 million after deploying USD 1 million, with a 3x total capital multiple, would allocate USD 1 million as returned capital and USD 2 million as additional funder return. USD 7 million, or 70%, would remain for the claimant in that simplified example. Taxes, other creditors, counsel’s deferred fees and separate expenses are excluded.

Model smaller recoveries as well as the optimistic result. Under the agreed non-recourse model, the claimant pays nothing to the funder if the case is lost, but third-party adverse costs can remain. Dubai Legal Funding does not offer cover or insurance for an opponent’s legal costs. Ask counsel to explain how an unfunded liability, cost order or contractual breach affects the position.

Official sources and further reading

• ADGM legislation and current rules
• ADGM Litigation Funding Rules 2019