An established and global market of substantial scale, the litigation funding sector utilizes both finance company (loans for an individual case and loans to fund a portfolio of cases) and private equity models to invest in commercial litigation. Third-party private sector investment in litigation is already a widespread practice—with investors receiving a share of awards when cases are successful in exchange for funding legal costs. Traditional litigation funds invest in commercial claims to maximize high financial returns irrespective of wider societal concerns and potential impacts.
Aristata seeks to fund strategic litigation by groups who otherwise would not be heard before a court and cases that could potentially seed systemic change, equalize power dynamics, and protect communities.
Significant increase in public interest litigation, specifically from marginalized populations who stand to benefit. Secondly, support of social justice cases that result in legal victories will lead to positive legislative and policy changes.
SEDF had the opportunity to play a catalytic role in providing a commitment to this first-time fund manager and assist fundraising for this innovative and risky project.