Litigation funding—also known as litigation financing or third-party litigation funding (TPLF)—provides a person or entity with the money to pay attorney fees, expert witnesses, and other costs necessary for litigation. Litigation funding is essentially a loan, secured by the proceeds of the expected settlement or collection of judgment in a lawsuit, and is designed to allow persons or entities without the necessary resources to pursue valid claims in litigation.
In North Dakota, litigation funding, also known as third-party litigation funding (TPLF), is a practice where a third party provides financial assistance to a litigant to cover legal expenses such as attorney fees and expert witness costs. This funding is typically non-recourse, meaning that the funder will only be repaid from the proceeds of a settlement or judgment if the litigation is successful. North Dakota does not have specific statutes directly regulating litigation funding for general civil litigation. However, any litigation funding agreements must comply with general state laws on contracts, and must not violate laws against champerty (prohibiting third parties from supporting litigation in exchange for a share of the proceeds) or maintenance (improperly supporting litigation in which the supporter has no legitimate interest). Additionally, ethical rules for attorneys in North Dakota may impose certain restrictions on the involvement of third parties in funding a client's litigation to ensure that the attorney's professional judgment is not compromised.