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Litigation Financing Agreement Template for Switzerland

A comprehensive legal agreement governed by Swiss law that establishes the terms and conditions under which a third-party funder provides financial support for litigation or arbitration proceedings. The agreement details the funding arrangement, including the scope of funding, return structure, control mechanisms, and distribution of proceeds. It incorporates specific provisions compliant with Swiss federal regulations, particularly the Swiss Code of Obligations and Civil Procedure Code, while addressing key aspects such as confidentiality, privilege, and professional conduct requirements under Swiss law.

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What is a Litigation Financing Agreement?

The Litigation Financing Agreement is a sophisticated legal instrument used when a party seeks external funding to pursue litigation or arbitration proceedings in Switzerland or under Swiss law. This document is essential when a claimant requires financial support to pursue a legal claim but lacks the resources or prefers to share the litigation risk. The agreement comprehensively details the funding arrangement, including the funder's commitment, return structure, control rights, and risk allocation. It must comply with Swiss regulatory requirements, which are generally favorable to litigation funding arrangements, as Switzerland does not impose significant restrictions on third-party funding. The document is particularly relevant in complex commercial disputes, international arbitration, and high-value litigation where significant funding is required.

What sections should be included in a Litigation Financing Agreement?

1. Parties: Identification of the Litigation Funder and the Funded Party

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

3. Definitions and Interpretation: Key terms used throughout the agreement and rules of interpretation

4. Scope of Funding: Details of what costs and expenses will be covered by the funding

5. Funding Amount and Drawdown: Specification of the total funding commitment and process for accessing funds

6. Returns and Distribution of Proceeds: Structure of the funder's return and waterfall of payments from litigation proceeds

7. Conditions Precedent: Conditions that must be satisfied before funding obligations commence

8. Representations and Warranties: Statements of fact and assurances from both parties

9. Obligations of the Funded Party: Ongoing duties including information provision and cooperation

10. Control and Conduct of Litigation: Decision-making rights and consultation requirements

11. Confidentiality and Privilege: Protection of sensitive information and legal privilege

12. Termination: Circumstances allowing termination and consequences

13. Dispute Resolution: Process for resolving disputes between the parties

14. General Provisions: Standard contractual provisions including governing law, notices, and amendments

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

1. Security Arrangements: Include when the funder requires security over the claim or other assets

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

3. Multiple Party Provisions: Include when there are multiple claimants or defendants being funded

4. Cross-Border Provisions: Include when the litigation involves multiple jurisdictions

5. Assignment and Subrogation: Include when rights to the claim may be transferred

6. Third Party Rights: Include when certain provisions are intended to benefit third parties

7. Anti-Money Laundering Compliance: Include when enhanced AML provisions are required

What schedules should be included in a Litigation Financing Agreement?

1. Schedule 1 - Funding Budget: Detailed breakdown of anticipated costs and funding allocation

2. Schedule 2 - Litigation Plan: Timeline and key stages of the litigation

3. Schedule 3 - Return Calculations: Detailed methodology for calculating the funder's return

4. Schedule 4 - Drawdown Conditions: Specific requirements and procedures for accessing funding

5. Schedule 5 - Reporting Requirements: Format and frequency of progress reports

6. Schedule 6 - Key Personnel: List of key individuals involved in the litigation

7. Appendix A - Form of Drawdown Notice: Template for requesting funding disbursements

8. Appendix B - Form of Progress Report: Template for regular litigation status updates

Authors

Alex Denne

Advisor @ GenieAI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Switzerland

Publisher

GenieAI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use

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