Before commencing arbitration or litigation proceedings, claimants should not only consider the merits of their cases and whether they are likely to win, but also whether engaging in these proceedings is worth their time and expense.
The use of innovative litigation-financing tools should be part of the calculus as to whether to initiate a dispute proceeding. One such tool is to “monetize” the arbitral award, which usually means sharing the claimant’s potential entitlement to monetary damages with a third-party buyer, or otherwise outright assigning the award to the third-party buyer, both in exchange for immediate or accelerated payments.
By monetizing an award, claimants can get monetary payouts sooner rather than waiting for the outcome of the arbitration proceedings (and, potentially, annulment and/or enforcement proceedings if the award-debtors/respondents do not comply voluntarily with the awards). Additionally, claimants shift or at least reduce the risks associated with pursuing enforcement onto a third-party.
