Litigation Funding: A Fixed-Income Investment
Discover how litigation funding investments provide attractive fixed income returns— an investment class independent from stock market fluctuations.
Why Consider Litigation Funding?
Looking for Stable and Secure Fixed-Income Investments? Explore Litigation Funding.
Alternative investments are growing in popularity, including real estate, private debt, and litigation funding.
Litigation funding, also known as legal finance, is an alternative investment where third-party funders provide capital to cover the costs of legal claims.
Fenchurch Legal focuses on litigation disbursement funding, which diversifies risk by funding multiple legal claims concurrently rather than relying on a single case.
- Traditional investments (stocks, bonds) are volatile or low-yield.
- Litigation disbursement funding offers predictable and secured returns.
- It provides regular interest payments and low correlation to market risk.
How Does Litigation Funding Work?
Investment >
Investors contribute capital, which Fenchurch Legal uses to fund legal cases.Funding Allocation >
Funds are released to the law firm to finance a diversified portfolio of legal claims.
Claim Submitted >
Claimants submit a claim with a law firm, which is only accepted if it has a strong chance of success.Insurance Protection >
All claims are backed by an After-the-Event insurance policy, mitigating risk in the event of an unsuccessful claim.
Case Conclusion >
Cases conclude either through a successful settlement or, if unsuccessful, costs are covered by the ATE insurance.
Investor Returns >
Fenchurch Legal distributes returns to investors through scheduled coupon payments, with capital returned at maturity.
Key Benefits of Litigation Funding as a Fixed-Income Investment
The Advantages of Litigation Funding as a Fixed-Income Investment Strategy
The litigation funding market is growing rapidly, forecasted to reach $37.5 billion globally by 2028. Investors are drawn to its predictable income, secured returns, and low correlation to market risks.
Historically, litigation funding has provided stable yields, often exceeding traditional bonds and fixed-income alternatives.
Fixed-Income Structure
A structured investment offering predictable income.
Low Market Correlation
Returns are tied to legal case outcomes, not economic downturns.
Strong Security
Investments are secured with After-the-Event (ATE) insurance, which helps cover legal costs if cases are unsuccessful.
Diversification Benefits
Risk spread across thousands of claims, diversifying the risk and reliance on one single case.
Competitive Returns
Litigation funding has historically outperformed many fixed-income investments.
Growing Demand
Growing demand for funding disbursements in smaller cases, the market is poised for expansion.
Frequently Asked Questions
Litigation funding is an exciting fixed-income investment, offering fixed-income returns and portfolio diversification. However, we understand that you may have questions about how it works, the risks involved, and what to expect.
Below, we've answered some of the most common questions from investors. If you’d like more details feel free to get in touch with our team.
Q. What are the different types of litigation funding?
There are two main types:
-
Big-Ticket Litigation Funding – Focuses on high-value cases (e.g., class actions, commercial disputes) with higher potential returns but greater risk.
-
Small-Ticket Litigation Funding – Funds high volumes of smaller consumer claims, offering more stable and predictable returns by spreading risk across multiple cases.
Q. How does litigation funding generate returns?
Fenchurch Legal operates a fixed-income model. Funds are lent to law firms, who repay the loan once a case concludes.
- Investors receive quarterly fixed returns, with capital repaid at maturity.
- All cases are secured with ATE insurance, ensuring repayments even if a case is unsuccessful.
Q. How does the loan process work?
Law firms receive short-term loans (12-24 months) to cover case disbursements. Fixed fees are deducted at origination, ensuring a portion of returns is secured upfront. The loan is repaid upon case resolution or via ATE insurance if the claim is unsuccessful.
Q. Who can invest in litigation funding?
This investment is available to Professional and Qualified Investors only, and not Retail Clients.
If you are unsure about suitability, we recommend consulting with a financial advisor.
Q. How is investor capital secured?
Fenchurch Legal applies multiple security layers to protect investor capital:
- ATE Insurance on all claims.
- Fixed charge & assignment over case and insurance proceeds.
- Debentures over the borrower’s assets.
- Personal guarantees from key law firm stakeholders.
- Optional enhanced capital protection insurance wrappers for larger investments.
Q. What are the investment options and expected returns?
Fenchurch Legal offers income and growth-focused products on a 2 year or 3 year term, with returns between 11-14% p.a.
Q. How do unsuccessful cases impact investor returns?
ATE insurance ensures full repayment, meaning unsuccessful claims do not affect investor returns.
Investors receive consistent coupon payments, regardless of case outcomes.
Want to Learn More About Litigation Funding as a Fixed-Income Investment?
Complete the contact form below, and our team will be in touch to answer your questions and discuss how litigation funding could fit into your investment portfolio.
