How Litigation Funding Works

What happens at each stage?

The four stages below separate an initial response from a final funding commitment. A positive screening answer is an invitation to review documents, not approval. Timing depends on the complexity of the case, the completeness of information and the conditions in any proposed agreement.

What do we look for?

Strong merits supported by contemporaneous documents are the starting point. We assess liability and available defences, then test the claimed loss rather than relying on the amount pleaded. Counsel’s assessment and any independent expert material help establish the recoverable value and the risks.

We look for claim value at least 8–10 times the required budget, a solvent defendant with identifiable, reachable assets, a clear enforcement route and experienced counsel on record or willingness to appoint one. These factors are considered together. A nominally high claim-to-budget ratio cannot compensate for doubtful merits or inaccessible assets.

The route may involve DIFC, ADGM, onshore UAE or a New York Convention country for an arbitral award. Counsel must identify the correct recognition and execution procedure. An enforcement assumption should be documented with asset information, likely objections, costs and a realistic timeline.

What should the screening form contain?

Allow approximately two minutes for the basic outline: parties, forum, claim value, stage, key deadlines and a brief description. A later review will usually need a chronology, core contracts, correspondence, counsel’s opinion, a staged budget and defendant asset information. Start with a non-privileged summary.

Do not delay limitation advice, a freezing-order application or other protective steps while waiting for a funding answer. Urgent matters, such as limitation deadlines or freezing orders, can be fast-tracked where possible. A fast-track request is not a promise that diligence or legal action can be completed in time.

What costs can be funded?

The agreed budget may include court and arbitration fees, lawyers’ fees, experts, translations, notarisation, service and enforcement. Spend is allocated to stages and released under agreed milestones. Ask whether taxes, appeals, security, cost overruns and recovery proceedings are included rather than assuming a single budget covers everything.

Dubai Legal Funding does not offer cover or insurance for an opponent’s legal costs. Funding your own legal spend does not cover an order to pay the other side’s costs. Counsel should assess exposure to security for costs and adverse costs in the relevant court or arbitration separately.

Who directs the case and settlement?

The claimant and their lawyers direct strategy and retain responsibility for advice and conduct. We do not act as counsel or direct the case. The funding agreement should set out reporting, budget consultation and any settlement consultation rights so everyone understands how decisions are handled.

Independent advice matters before the term sheet becomes a binding agreement. Review termination rights, changes in merits, extra-budget requests, settlement disagreements and dispute-resolution provisions. Ask who pays committed expenses if funding ends and whether any breach changes non-recourse treatment.

What happens if the claim loses or succeeds?

Under the agreed non-recourse model, you pay nothing to the funder if the case is lost. The agreement defines the exact treatment, including exclusions and obligations. It does not automatically remove third-party costs liabilities, so separate advice on those exposures is necessary.

If money is recovered, proceeds follow the agreed distribution waterfall. An award or judgment may still require enforcement before funds are available. Terms are agreed case by case in a term sheet before commitment, and no result or approval is guaranteed.