Litigation funding is a simple process involving an agreement between two parties: one is the claimant, who is involved in a legal dispute, and the other is the funder, who provides funding for the litigation claim.
The funder finances the case, and the parties enter into an agreement to share any court award or settlement. From a Sharia perspective, it works as an award-sharing arrangement.
For the Insaaf Litigation Fund, we use lawtech to enhance our case selection process, before independent legal experts review each case. We only fund cases that are Sharia-compliant and have high chances of success.
The case selection process works like this:
Every case is disputed between a claimant and a defendant. There are only two possible outcomes:
- The claimant’s case is successful (meaning it is settled early or wins in court): Funds are paid to the law firm representing the claimant, before they’re distributed between the funder and the claimant.
- The claimant’s case is unsuccessful (meaning it loses in court): The fund’s deployed capital is at risk and not recoverable in the unlikely event a case loses.
The funding and award process works like this: