Can Lawsuits Become India's Next Big Investment Asset?

In 2019, Kundan Shahi set out to build something that India had never seen before: a litigation funding company. At the time, unconventional investment options such as non-fungible tokens (NFTs), fractional ownership of art, whisky casks and even sneakers were beginning to attract serious investors. Shahi believed lawsuits could become the next investment opportunity, particularly in a country like India.

 

The idea was rooted in a simple problem. India has one of the world's largest judicial backlogs, with approximately 54 million cases pending in its courts. Many of these cases involve significant amounts of money, but the people or businesses entitled to claim it often cannot afford the long and expensive legal battles required to recover it.

 

This is where litigation funding comes in. An investor finances the legal expenses of a promising case, allowing the claimant to pursue it without bearing the entire financial burden. In return, if the case is successful, the investor receives an agreed share of the money recovered.

 

The model becomes even more interesting when multiple legal claims are brought together into a single investment pool. It begins to resemble a private equity fund, but with one key difference: instead of investing in companies, the fund invests in legal claims with the potential for future payouts.

 

For Shahi, this presented an opportunity to look at India's legal system from an entirely different perspective. What is often seen as a long and expensive process could also represent an untapped investment opportunity. By bringing investors and claimants together, litigation funding attempts to turn unresolved legal claims into financial assets, while giving people the resources to pursue money they may otherwise struggle to recover.