The Funder Reward
In return for the investment the investor has made, and should the case win, the funder will receive their agreed share of the proceeds. This is referred to as the 'Funder Reward'. That explained, should the case be unsuccessful, the funder will lose their investment, but this ensures the consumer litigant does not inherit a liability.
In some circles, they describe it as being akin to betting on a roulette table - the funder places a bet in the hope the bet will deliver a future reward. However, it might be said, the bet made is calculated, professionally assessed and an acceptable risk venture. Accordingly, most funders look to make litigation funding available as essentially they believe elevated risk provides a higher return on the investment made.
The funder receives a share of the proceeds only on successful cases, or those which have been negotiated by the litigant’s lawyers. This financial reward will (in the case of a litigation claim) typically consists of either a percentage of the actual damages recovered, or multiple amounts to reflect all litigants, in say a group action. Should a case be meritorious, then the 'bet or 'risk' the funder made will be returned as part of the arrangement.
Thus, consumers should view the offer of litigation funding as a tool which can be employed to provide risk-free litigation or a valuable means of accessing justice. The benefits are obtaining a professional opinion as to the merits of the risk being taken and progressing your case from a David-v-Goliath to a Goliath-v-Goliath or you could continue to employ your own funds to have a continuance of the lifestyle you presently enjoy.