The Litigation Financing Agreement is essential for parties seeking to pursue legal claims in Denmark who require external funding to support their litigation costs. This document type has become increasingly important as litigation funding gains acceptance in the Danish market, providing access to justice for parties with meritorious claims but insufficient resources. The agreement comprehensively addresses all aspects of the funding relationship, including detailed financial terms, control mechanisms, and risk allocation. The document must comply with Danish law, particularly the Administration of Justice Act (Retsplejeloven) and contract law principles, while also considering professional ethics rules affecting litigation funding arrangements. It's typically used in commercial disputes, class actions, and complex litigation where significant funding is required, and includes specific provisions for the Danish legal context regarding cost allocation, settlement procedures, and professional responsibilities.

1. Parties: Identification of the Funder, the Funded Party, and any other relevant parties to the agreement

2. Background: Context of the litigation, purpose of the funding arrangement, and brief description of the underlying dispute

3. Definitions and Interpretation: Definitions of key terms used throughout the agreement and rules of interpretation

4. Funding Commitment: Details of the funding amount, drawdown conditions, and funding schedule

5. Return on Investment: Calculation methodology for the funder's return, including percentage of recoveries and priority of payments

6. Conditions Precedent: Conditions that must be satisfied before the funding obligation becomes effective

7. Representations and Warranties: Statements of fact and assurances from both parties

8. Obligations of the Funded Party: Ongoing duties including information provision, cooperation, and conduct of litigation

9. Control and Decision-Making: Rights regarding litigation strategy, settlement decisions, and choice of legal representation

10. Costs and Expenses: Allocation of litigation costs, adverse costs, and other expenses

11. Confidentiality: Obligations regarding confidential information and permitted disclosures

12. Term and Termination: Duration of the agreement and circumstances allowing early termination

13. Consequences of Termination: Rights and obligations of parties upon termination

14. Assignment and Transfer: Restrictions on transfer of rights and obligations under the agreement

15. Notices: Process for formal communications between parties

16. Governing Law and Jurisdiction: Specification of Danish law as governing law and jurisdiction for disputes

17. General Provisions: Standard boilerplate clauses including severability, entire agreement, and amendments