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What is litigation financing and how can you benefit from it?

Litigation financing can help you to enforce a claim, even if you are lacking finances to cover all the costs of your litigation. We examine your case and pay all the costs of litigation. If you win the case, FORIS receives a share of the achieved revenue, after the costs have been balanced. If you lose, FORIS will cover all costs. Further information about the necessary steps and advantages can be found here.

What conditions must be met for my case to be eligible for monetisation by FORIS?

Your case must fulfil the following basic conditions:

  • a claim amount of at least EUR 1 million
  • your opponent has a credit rating of at least "BBB"
  • your opponent is a company with its registered offices in Germany
  • your case has been approved for litigation financing

How and when do I have to pay the purchase price?

Either by advance payment, confirmation of available balances in a trust account, or an agreement to bear the costs issued by your attorney. For advance payment, simply wire the purchase price (including company equity) to the account listed in the reservation confirmation. Alternatively, it is also sufficient if an attorney or accountant confirms the deposit of the purchase price in their client account – for the purpose of forwarding it to us – or guarantees payment of the purchase price irrevocably and unconditionally in writing. In such cases, the purchase price increases by EUR 100 or 200, depending on the company, to cover our additional costs.

What is monetisation and what benefits does it offer?

We monetise your contested claim, that means that we

  • perform the litigation for your case, which relieves the burden on your legal department and your attorneys;
  • we immediately pay you a part of the value of the claim, which improves your liquidity long before the judgement takes effect; and
  • we finance the entire litigation, which means you do not have to create reserves for anticipated litigation costs, or you can release any reserves already accrued.

Instead of the stress of litigation, you can focus on what is important. Additional information on the processes and advantages of monetisation can be found here.

 

 

What is a shelf company and what advantages does it offer?

A shelf company is a newly established company that has already been recorded in the commercial register. The lengthy and risky start-up phase in which company founders are subject to personal and joint liability is thereby avoided by acquiring a shelf company. All the start-up formalities have been completed, it is not necessary to refer to a “company in formation” and any liability is limited to the company's assets thanks to being recorded in the commercial register. A shelf company can be taken over with immediate effect and adjusted to fit your planned business activities. Shelf companies have not carried out any prior business activities and are available for immediate acquisition. We do not sell shell companies, i.e., inactive companies with previous business operations. You can directly reserve a shelf company; the acquisition can be completed within 24 hours. Click here for more information.

In which cases and under what conditions does FORIS finance litigations?

FORIS examines, swiftly and free of charge, the opportunity of financing your costs of litigation. The requirements are:

  • Pecuniary claims exceed EUR 100.000
  • Your lawyer recommends litigation
  • The claim’s prospects are profoundly promising
  • The liquidity of the opposing side has to be asserted by FORIS

Does FORIS require any additional documents to assess monetisation?

We require and use the same documents for the monetisation assessment as for the assessment on litigation financing.

Does FORIS also accept cases which are already issued?

Yes. It is still possible to finance litigation after the lawsuit has been filed. Generally, litigation financing can be requested at any time or stage.

We recommend you contact us as soon as possible by phone. This way we will be able to discuss two important points in advance: what stage is the lawsuit currently in and what documents are required for our examination. You can contact us under + 49 228 95750-50. Generally, litigation financing can be requested at any time or stage.

Which costs are included in the purchase price?

The purchase price includes the paid up company equity. For example, a shelf GmbH may have share capital of EUR 25,000 or a shelf GmbH & Co. KG may have a limited partner's contribution of EUR 500 in addition to the share capital of EUR 25,000.

The notary and court costs in connection with the takeover of the shelf company are not included in the purchase price. These are to be borne by the purchaser directly.

How long does it take for FORIS to assess my case?

To be eligible for monetisation, your case must first be approved for litigation financing. The duration of our assessment, both for litigation financing and monetisation depends very much on the complexity of each individual case. This includes both the complexity of the facts of the case as well as the legal basis of the claim.

How quickly can I purchase a shelf company?

You can reserve a shelf company immediately, and the acquisition can be completed within 24 hours.

What do I get when I purchase a shelf company from FORIS?

You will receive:

the certificate of incorporation, articles of association, shareholder resolution, list of shareholders, notice of entry in the commercial register with the German HRB number, sample agreements for sale and transfer, powers of attorney for the new managing director, checklist for the purchase transaction, and service from our FORIS team.

If my case is eligible for monetisation: When will I receive an offer from FORIS?

We will inform you as soon as our assessment on litigation financing is completed and we have approved your case. The assessment on monetisation is started immediately after that. You will hear the results after your case has been approved, and we will send you an offer for monetisation of your legal claim. Our corporate attorney for your case will contact you directly and personally, provide you with additional information and send you a written offer by email.

If my case is not eligible for monetisation: What are the alternatives?

In the event that your case is approved for litigation financing but not for monetisation, we would be happy to still provide you with litigation financing. Our attorneys will contact you directly and personally with our offer.

How can I expedite the purchase transaction?

Processing of the reservation of a shelf company as well as preparing the sale and transfer agreements can be expedited by a quick return of the completed questionnaire as well as the immediate payment of the purchase price.

As proof of the payment of the purchase price, you may also send an agreement to bear the costs of the purchase drawn up by an accountant, attorney or notary along with their confirmation of deposit of the purchase price into a corresponding client account (see above).

Do I need my own notary?

The certification of the sale agreement can be done before a notary of your choice in Germany. You do not need to travel to our offices.

How much is the payment that I will receive for my disputed claim?

In general, there is no fixed amount for the payment of your disputed claim. A precise amount cannot be determined in advance as our offer depends to a great extent on the complexity of each individual case.

Which lawyer will execute the litigation?

The lawyer who was appointed by the claimant. The claimant has free choice of lawyer. After signing the litigation financing contract, the case will be continued by the claimant’s chosen lawyer. FORIS essentially remains in the background but is available to provide help, knowhow, support and guidance.

What information do I need to give to my notary and what do I need to bring to the appointment?

We will send all the necessary documents directly to the notary of your choice. If you do not have a specific notary of your choice, we would be happy to set up an appointment with a notary close to where you are located and can arrange the earliest possible date. Usually, all you need to bring with you to the appointment with a German or foreign notary is a valid ID document and, if necessary, a residence permit. For German and foreign legal persons, we recommend contacting the notary in advance to clarify any additional requirements. These could be commercial register extracts, possibly with an Apostille and translation.

Is it possible to receive monetisation for claims in a foreign jurisdiction?

Any case is eligible for monetisation as long as the defendant against whom a claim would be enforced maintains its registered offices in Germany.

What kind of situation may occur in the case of a proposed settlement either by the defendant or by the court?

If the court or defendant proposes an out–of-court settlement, we will discuss this with the assistance of your lawyer. If one of the contractual parties is against an out-of-court agreement, and therefore no consensus can be reached, it is possible to rearrange the contractual cooperation. This means, the quitting contractual party is compensated with a premium equal to the amount offered by the out-of-court settlement. Thus, the remaining party can from now on enforce the claim on its own behalf.

What details and/or characteristics of the shelf company am I allowed to change?

The company can be fully adapted to the purchaser’s situation. In order to avoid problems when recording any changes into the commercial register, the company name and business purpose should be verified by the CIC (Chamber of Industry and Commerce).

What are the advantages of monetisation over to litigation financing?

The greatest advantage of monetisation compared to litigation financing is the immediate liquidity provided to you from your disputed claim. Without having to assume the risks of enforcing your claim, monetisation will allow you to increase your liquidity and avoid having to directly manage the costs of the legal dispute. You can avoid having to create reserves for litigation cost risks since FORIS assumes the litigation financing for each case approved for monetisation. Any previously accrued reserves for litigation costs can then be released.

Will FORIS agree to work with my attorney for the ongoing prosecution of my case?

If is monetisation offered, FORIS takes over the case management and removes any burden on your legal department and management from having to deal with your case. An important part of case management is finding the right attorney for your case. This may be the attorney whom you have already hired.

Does FORIS also finance claims in foreign matters?

Yes. For several years, FORIS has financed litigations in Germany, Austria, Switzerland, Liechtenstein and the USA. For cases which are issued in none-German-speaking countries, we will require information about the court and the language in which the case is pursued. Additionally, we have to know in which country the defendant is registered and located.

What information and/or characteristics of the shelf company do I have to change?

For the acquisition of the company, the company name, business purpose, management and list of shareholders must be changed.

Does FORIS also finance arbitration?

Yes. FORIS finances national and international arbitration cases, given that they are pursued in German or English.

Is the amount of payment for assuming control of my case negotiable?

FORIS makes every attempt to present an appropriate offer that matches your case. If, however, you are not satisfied with the amount of the payment or with the proposed contractual agreement, FORIS will work to accommodate you as much as possible. If you as the claimant and FORIS are unable to reach an agreement on the amount, there remains the option of direct litigation financing from FORIS without monetisation.

May I change the name of the company to any name I choose?

Yes, you may choose whatever name you like for the company name. Please confirm the desired name with your notary.

What are the advantages of litigation financing over governmental legal aid? (e.g. PKH in Germany)

Litigation financing is suitable for everyone, independent of their financial situation. Governmental legal aid (GLA) can usually only be claimed by people who are legally declared to be indigent. If you receive GLA, you have not endowed anything. The GLA will only be lent. When your financial situation improves, the state will demand a refinance. Yet, even for these claimants, litigation financing can offer advantages over governmental legal aid: unlike governmental legal aid, litigation financing will defray all occurring costs, i.e. even costs which accrue due to reimbursement claims of the defendant in case of a loss. Furthermore, the entrusted lawyer will get full compensation for his efforts while governmental legal aid will only pay a fraction of the emoluments.

Are any particular legal areas excluded from monetisation?

No, however, certain basic conditions must be met (see first question on monetisation).

May I retain the existing name of the company?

As the current corporate names of our shelf companies are invented names, it is recommended that you do not retain the previous name and in exceptional cases only do so with prior approval.

What characterises FORIS in comparison to other litigation financiers?

FORIS is the inventor of litigation financing – since 1998. It therefore possesses a considerable amount of experience and expertise and supervises financed lawsuits with a lot of effort and commitment. Moreover, FORIS is a discrete and publicly traded company, independent of parent companies in its decision making. A possible conflict of interest, which is common in the insurance business is therefore eliminated.

May I move the registered offices of the company?

Yes, you can move the registered offices of your new company to any location in Germany.

How am I paid the amount for my claim by FORIS?

After signing the agreement, the negotiated advance payment for the disputed claim is wired to your bank account. The exact payment arrangements are laid out in the agreement with FORIS.

How much does the pre-examination cost?

The complete pre-examination is free of charge for you. This includes the estimated probability of success and the utilisation of the company's internal risk-filter. However, a requirement hereto is that the request is submitted by a lawyer who was entrusted with the supervision of the claim. Claimants who are requesting litigation financing directly are recommended to contact a lawyer of their choice as soon as possible. We will gladly help you with your search for an appropriate solicitor.

When is the agreement with FORIS concluded?

The agreement is concluded after you send us confirmation that you have accepted our offer and we send you the written agreement for your signature. After we receive a signed copy of the agreement from you, FORIS' representatives declare acceptance of the agreement, thereby rendering it legally binding.

Do I have to change the address of the company?

The current domestic company address may not continue to be used and must be changed at the meeting with the notary. Please also see to it that the mailing address of the company is valid to ensure safe delivery of any mail.

Is FORIS entitled to resign from the contract?

If the prosecution of the litigation does not seem promising, for example in the case of amended jurisdiction or interim bankruptcy of the defendant, FORIS is entitled to resign from the financing.

Is it possible to apply for monetisation after the claim has been submitted?

Yes, even after your claim has been submitted it is possible to receive monetisation. The progress of the litigation up to that point plays a role in defining the amount of the advance payment from FORIS. In general, monetisation is possible at any time up to the full resolution of your disputed claim to your satisfaction.

May I change the business purpose of the company to any purpose I choose?

Yes, you can adapt the newly acquired company to any desired business activity. Certain business purposes require authorisation from the trade office (Gewerbeamt).

What kind of costs may be inccured by the claimant?

After the contract has been established, the claimant does not have to personally compensate for any costs which are associated with the enforcement of the case. This is also the case if a favourable title cannot be realised.

May I acquire a shelf company without share capital and only pay the surcharge?

No, this is not possible.

Is there an upper limit to the amount of the disputed claim?

No, for monetisation there is no upper limit to the amount of the payment for the disputed claim.

Do I have to sign a contract for the examination?

No. The examination will be executed without a contractual agreement.

Does the shelf company have a business license and/or a permit to allow hiring out temporary workers?

No, since this would require its registration as a commercial enterprise. This would turn our shelf companies into shell companies.

Do I have to be represented by a lawyer?

A request for litigation financing should always be submitted by a lawyer. Additionally, the submission through a lawyer will accelerate the adaptation of your case.

When can I start working with the shelf company?

In the event of acquisition of a shelf GmbH, you are able to carry out business activities on behalf of the shelf company immediately after the meeting with the notary. Proof is provided by the signed sale and transfer agreement as well as the new registration in the commercial register. The latter must be submitted to the court after the meeting with the notary. The appointment of a managing director takes effect immediately. The recording of the managing director in the commercial register is not required for the appointment to be effective.

At what point during the trial is coordination between claimant and FORIS necessary?

If cost-related decisions about the litigation have to be made, a discussion including both contractual parties (claimant and FORIS) has to be held in advance.

Does the shelf company have a tax identification number and/or a VAT ID number?

No. Our shelf companies have not been registered with the tax authorities. The management of the company will register the company for the first time with the relevant tax office and apply for a tax number from that office. The same applies for the application for a VAT ID number.

Am I allowed to reveal the litigation financing to the opposing party?

Generally speaking, litigation financing should be kept secret. Yet, if FORIS decides that disclosure would be reasonable due to strategic motives, a revelation is certainly possible.

Are some fields of law excluded from litigation financing?

No. Generally, all fields of law are suitable for litigation financing.

What will FORIS be awarded in the case of success?

The margin share going to FORIS will be negotiated individually with you in advance. Among other factors, it depends on the claimed amount, as well as on the economical and juridical risk attached to the individual case. The minimum percentage of revenue awarded to FORIS is 10% in the most favourable cases. FORIS will provide you with an offer which will suit the wishes and aims of the claimant.

What costs does FORIS cover?

FORIS will pay all costs of litigation which accrue after conclusion of our contract. This includes: costs of the lawyer and court fees, costs of taking evidence, as well as reimbursement claims of the opposing party. For legal fees of the defendant and court costs, we place the statutory rates. In Germany, this would be RVG and GKG. Individual agreements on the scope of our cost cover are available and depend on claimant wishes and the individual case. The costs of submission and preparing the litigation financing application are not covered by FORIS in advance.

How long does the examination of my application take?

The duration of the examination depends on the individual case, as well as on the completeness and scope of the documents provided. Our checklist for litigation financing can help you to speed up this process.

What kind of documents need to be provided for your case examination?

We usually require a draft of the written lawsuit or a legal opinion from a lawyer, as well as the correspondence from the defendant. Furthermore, data about the creditworthiness of the defendant is very helpful. Do not hesitate to contact us by phone (+49 228 95750-50), because this question can be answered in detail based on the specific case description.

 


Are there any costs tied to the examination of the financing request?

No. Our examination is completely free.

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