Litigation Financing Agreement for India

Litigation Financing Agreement Template for India

A comprehensive agreement governed by Indian law that establishes the terms and conditions under which a third-party funder provides financial support for legal proceedings. The document details funding commitments, return structures, control mechanisms, and risk allocation between the funder and funded party, while ensuring compliance with Indian legal requirements and professional conduct rules. It addresses key aspects such as confidentiality, privilege protection, decision-making rights, and dispute resolution mechanisms, tailored to the Indian judicial system's specific requirements and common law principles.

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What is a Litigation Financing Agreement?

The Litigation Financing Agreement serves as the primary contract between a third-party funder and a party seeking funding for legal proceedings in India. While litigation funding is not explicitly regulated in India, this agreement operates within the framework of common law principles and existing contractual regulations. The document is typically used when a party has a strong legal claim but lacks the financial resources to pursue litigation, or wishes to manage litigation costs and risks more effectively. It comprehensively covers funding terms, success fees, control rights, confidentiality obligations, and termination provisions, while ensuring compliance with Indian legal requirements including the Contract Act, 1872, and relevant Bar Council regulations. The agreement is particularly important given the evolving nature of litigation funding in India and the need to carefully structure arrangements to avoid conflicts with champerty and maintenance principles.

What sections should be included in a Litigation Financing Agreement?

1. Parties: Identification of the Funder and the Funded Party, including full legal names and addresses

2. Background: Context of the underlying litigation and purpose of the funding arrangement

3. Definitions: Detailed definitions of key terms used throughout the agreement

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

5. Return Structure: Calculation and payment of the funder's return, including success fees and priority of payments

6. Control and Decision Making: Rights and limitations regarding litigation strategy, settlement decisions, and choice of counsel

7. Representations and Warranties: Standard and specific warranties from both parties

8. Confidentiality and Privilege: Provisions protecting confidential information and legal privilege

9. Reporting and Information Rights: Obligations to provide updates and information about the litigation

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

11. Dispute Resolution: Mechanism for resolving disputes between the parties

12. General Provisions: Standard boilerplate clauses including notices, amendments, and governing law

What sections are optional to include in a Litigation Financing Agreement?

1. Security Arrangements: Used when the funding is secured against specific assets or rights

2. After-the-Event Insurance: Included when ATE insurance is part of the funding arrangement

3. Multiple Party Provisions: Required when there are multiple claimants or group litigation

4. Cross-Border Provisions: Necessary for international litigation or foreign funders

5. Counsel Fee Arrangements: Included when the funder is also covering legal fees

6. Priority and Waterfall: Used in complex cases with multiple stakeholders and payment priorities

7. Portfolio Funding Terms: Required when funding multiple cases under one agreement

What schedules should be included in a Litigation Financing Agreement?

1. Schedule 1 - Case Budget: Detailed budget for the litigation including counsel fees and other costs

2. Schedule 2 - Drawdown Conditions: Specific conditions that must be met for each funding tranche

3. Schedule 3 - Return Calculations: Detailed formulae and examples of return calculations

4. Schedule 4 - Approved Counsel and Experts: List of pre-approved legal counsel and experts

5. Schedule 5 - Reporting Requirements: Templates and timing for required litigation updates

6. Schedule 6 - Case Theory and Evidence: Summary of the case theory and key evidence

7. Schedule 7 - Key Litigation Documents: Copies of essential litigation documents

8. Appendix A - Power of Attorney: If required for the funder to take certain actions

9. Appendix B - Communication Protocol: Procedures for maintaining privilege and confidentiality

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

India

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Financial Services

Insurance

Legal Services

Banking

Manufacturing

Technology

Real Estate

Infrastructure

Healthcare

Energy

Mining

Retail

Telecommunications

Professional Services

Construction

Relevant Teams

Legal

Finance

Risk Management

Compliance

Investment

Business Development

Commercial

Operations

Corporate Secretariat

Treasury

Relevant Roles

Legal Director

Chief Legal Officer

General Counsel

Litigation Manager

Finance Director

Chief Financial Officer

Risk Manager

Compliance Officer

Investment Manager

Portfolio Manager

Legal Counsel

Corporate Secretary

Business Development Manager

Claims Manager

Commercial Director

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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