Date: 10/06/2021

AmCham holds roundtable on Legal Financing

The event aimed at familiarising AmCham member companies with the concept of legal financing and providing a venue for them to discuss its advantages with foreign experts.

Third-party legal financing, an alternative to traditional litigation and arbitration, was explained by Christiane Deniger, Vice President at Burford Capital, and Jonathan Barnett, Market Head for the Austria and CEE Region at Nivalion, who presented their experiences and best global practice. The moderators, Milan Lazić, attorney at law and Vice Chair of AmCham’s Business and Corporate Law Committee, Nataša Lalatović Đorđević, attorney at law and Senior Partner at Karanović& Partners, and attorney at law and Partner at Moravčević, Vojnović & Partners in cooperation with Schoenherr, highlighted opportunities for Serbian companies touse these arrangements within the country’s legal framework.

In legal financing, legal proceedings become investments, and partiesseek funding to finance their legal expenses. This arrangement is costly, but winning the case pays off for the finance provider. This option is often used by businesses that lack the funds to pursue a case, or do but prefer not to use them for litigation. Legal financing is fairly common in the US and Europe, but much less so in Serbia and the region.

The finance provider must maintain close contacts with the client. It is crucial for thefinance provider to knowwhat the client wants at every stage of the process, as well as for the client to be aware of the finance provider’s goals. The primary role of the financing firm, as a third party in the dispute, is to assume and realistically assess the best and worst-case scenario.

The panellists explained that legal financing could be sought at any time. If the financing is extended before the client files a lawsuit, the process will be more expensive. By contrast, when a finance provider becomes involved late in the process, it will have access to more information and be better aware of the risks, which will make the process more affordable. There is no bad time to get involved, the panellists agreed, but the choice of moment depended on the client’s criteria, wishes, and means.

As a rule, finance providers stayed away from family disputes, the participants cautioned. In other cases, apart from the plaintiff, the defendant could also rely on legal financing, even though this was a much less common occurrence.

Answers to questions from the audience and video of the panel discussion are available here.