High net worth trust claims: the coming wave?

Critically for the beneficiary having succeeded in his action, and thereby having obtained an award in his favour, the successful navigation of these rules will result in the relevant jurisdiction upholding the award and allowing access to the underlying trust assets.

It is question (5), however, that is often in practice the most important one from the outset.

Since an attacking beneficiary has little or no access to the trust assets that may be required to fund the attack but is very often faced with a well-funded structure on the other side of the action, it can create the aforementioned “David and Goliath” scenario.

The question of how to fund the litigation is therefore critical, and it is in this sphere that third party litigation funding has an ever more important role to play.

Persistence pays

Offshore trusts disputes can therefore present unique challenges to claimants, lawyers and funders alike. Persistence and legal creativity, as well as raw capital, are key.

Leading professional funders recognise that multi-jurisdictional litigation and subsequent enforcement action takes time – measured in years, not months.

This is why non-recourse legal finance products are aimed at enabling claimants to pursue their claims to the fullest degree without the adverse financial impact or long-term financial risk that is inherent to any piece of litigation (no matter how meritorious).

Moreover, the funder’s interests as the provider of non-recourse finance are fully aligned with those of the claimant.

The leading funders operate at the centre of the global dispute resolution industry, with a network of relationships with lawyers and experts around the world.

Put simply, this means that the funder only receives a return on its investment if the claimant actually recovers proceeds from the litigation, whether through a judgment, arbitral award or negotiated settlement.

If the case is unsuccessful, the funder’s investment is written off and the claimant pays nothing – including any adverse costs award, for which 'after the event' insurance is put in place as part of the funding package.

This is why the best funders will conduct detailed legal and financial due diligence on any claim that they are looking to fund, to ensure – so far as is possible – that it is meritorious and enforceable.

It is only in that way that all parties can be confident that a claim will generate a healthy return for both the funder and, most importantly, for the claimant.

Picking a team

A professional funder can also provide more than just the capital required to pursue a claim.

The leading funders operate at the centre of the global dispute resolution industry, with a network of relationships with lawyers and experts around the world.