In today’s race to generate content, litigation finance firms have disseminated countless articles covering industry basics. If you pay any attention to the field, you have probably heard time and again that litigation finance is growing, awareness of litigation finance is increasing, the industry outlook is rosy and litigation finance can benefit parties in [insert area of law here] litigation. You are probably also aware of various ethical, legal, and regulatory issues that may be implicated by the use of litigation finance, such as champerty, maintenance, fee-splitting and disclosure.

Although it accounts for a significant amount of the capital invested in litigation, a lesser discussed aspect of litigation finance is what is known as “claim monetization.” While the concept of “monetizing” a legal claim is easy to grasp, many claimholders and practitioners are unaware of how monetization works in practice.

What Is Claim Monetization?