Insolvency and Bankruptcy Code is among the top 10 innovations in India in the last decade and it will help the economy to achieve some stability along with growth.
What services does the platform provide and how does it help entities/businesses ease the financial burden of litigation cases such as shareholder and IPR related disputes?
LegalPay is India’s first litigation funding and interim finance company enabling businesses to offset the legal cost from their balance sheet and utilising the capital earmarked for legal expenses for revenue generation activities.
LegalPay provides debt recovery and litigation management solution for businesses. We make non recource investment in commercial legal claims in exchange for a portion of the recovery made possible because of the lawsuit. Moreover, as the investment is non recourse in nature, the company is only liable to pay LegalPay back if the funded case is won resulting in a win win scenario for everyone.
Legal disputes like shareholder disputes, IPR disputes, commercial contractual disputes and others tend to be extremely capital extensive and add up to substantial expenses for the company. Companies can offset that cost with the help of LegalPay, as LegalPay will fund the case and pay the legal cost on behalf of the company in exchange for a portion of the future recovery.
How does LegalPay work? Who is your targeted audience?
LegalPay is unlocking high yielding alternative investment assets in the legal industry. We are active in litigation funding and the insolvency market with structured products offering high IRRs for investors looking for alternative investment assets.
Every opportunity that is sourced passes through a very strict underwriting process and only the highly meritorious opportunities are made available for investors on the platform.
Our target audience is stakeholders in the legal segment including lawyers, companies and resolution professionals who play the role of sourcing for us. Retail investors looking for high yielding alternative investment assets are also an integral part of our target audience.
Please share some details about your legal team?
We have a highly experienced legal team who works under the guidance of our legal and risk underwriting board. Our legal and risk underwriting board consists of distinguished gentleman who have a deep understanding of legal claims.
Our in house legal team has deep expertise in commercial legal disputes with prior work experience in top law firms and litigation in India knowing the ins and outs of commercial legal disputes. They have a combined experience of more than 50 years.
We also consult with subject matter experts whenever a need arises who have expertise in different areas of law.
How much do you charge your clients?
As mentioned earlier too, when dealing in litigation finance we make non-recourse investment in legal claims and our returns are closely linked with the plaintiff’s gains in the case. When a plaintiff works with us, they transfer the entire risk of the legal dispute to us as they pay no expenses for the legal dispute and only pay us back once the funded case is won.
Our charges on the claim depends on a case to case basis and it is depending on the perceived risk involved in the case ranging from 10% – 35% of the claim value.
Interim finance is a super secured lending product and enjoys a super seniority status in terms of payback which is mandated as per the law. The investors investing in interim finance enjoy very high yield on this product.
What are your funding and expansion plans?
We have just closed our Pre Series A round and are in active discussion with investors for our next round.
What is your outlook for 2022? Shed some light on your growth strategies for the upcoming year.
In the past year, we have witnessed an extremely welcoming response to litigation funding offering of ours and we have achieved a product fit in that sphere. In 2022 while we will continue working on litigation finance, we will also target the insolvency market more aggressively.
What does the future hold for litigation finance solution platforms in India?
There is no paucity of court cases in India with India seeing more than 2 crore fresh court cases every year along with a market for arbitration too. Pandemic has infact increased the market size for litigation funding in India with the companies seeing more legal disputes.
Globally, litigation funding is a collaborative industry with funders often co-investing in meritorious claims. We foresee the same trend happening in India.
What is the philosophy behind the inception of LegalPay?
The mission of LegalPay is to enable investors invest in alternative assest classes within legal finning domain.
We work with HNIs, UHNIs, domestic and international family offices to enable them to diversify their investments in alternative investment assets. We are providing them options in legal financing; in interim finance in the insolvency and restructuring segment which in itself a super secured asset class offering high returns and litigation funding which offers attractive returns. We are also providing them attractive investment options in stressed assets.
What is the size of the market and the opportunities ahead?
We are working in litigation funding and the insolvency market and have a combined market size of more than 25 billion USD.
What new projects are on its way for LegalPay?
We have started with a new technology platform catering to the needs of the insolvency market. Insolvency and Bankruptcy Code is among the top 10 innovations in India in the last decade and it will help the economy to achieve some stability along with growth. Its important to note that as India’s economy will grow so will the number of insolvencies grow and IBC has chartered a clear way on how to deal with insolvent companies. Our tech offering is catering to the needs of all the stakeholders in the insolvency and restructuring process making the entire process faster and efficient.
Source: Business World