Insurance financed claims

Hand-in-hand with the US market launch of the American Legal Finance Association as of 1998 insurance companies in Germany have emerged which finance claims in return for a share of the profit - also called "Litigation funding" or "Lawsuit financing". Actually one can find approximately 10 companies operating in the market place in Germany.

Minimum value in dispute (claim target) is between 50,000.- € and 100,000.- €. Nevertheless the companies will carefully asses the legal risk involved and will not accept each and every case.

In case of a successful outcome the insurance company will receive a certain share of the amount of the proceeds received e.g. a proportion of the proceeds relating to the outcome of the lawsuit. Minimum percentage is between 20% and 30% but can also be higher and will be agreed upon individually depending on the risk. One can also find graduated share scales depending on the achieved result. In the case of final loss of the lawsuit the insurance company bears all legal costs.

Legal insurance

There also exist Lawyer and Litigation insurances also called Legal Assistance insurances.

Legal insurances consist of different legal elements. As every different insurance company in the market offers different prices and insurance plans, there is no general system and no common set price.

Coverage for commercial contracts is possible but expensive and will contain considerable legal exclusions.

Most of the legal insurances have an average waiting time of three months as well as deductibles ("excess") amounting to a certain sum of money per claim.