Due Diligence for Litigation Funders

Litigation funding means an outside investor pays the costs of a lawsuit in exchange for a share of the recovery. A funder weighing that bet usually studies the claim and the law firm. But the funder is also betting on the defendant — how it tends to fight, and whether it can pay. That side of the diligence has always been hard to do at scale. Aggregate market intelligence is built for exactly that job.

The defendant is half the underwrite

Two similar claims can carry very different risk depending on who is being sued. A defendant with a history of dragging out every fight makes the case take longer and cost more. A defendant in financial decline may not be able to pay a judgment. Neither risk shows up in the claim file. Both belong to the institution on the other side.

For a funder spreading money across many cases, those two factors — how long it takes, and whether the money comes back — are the whole model.

What aggregate intelligence adds

When the defendant is an insurance carrier or a homebuilder — the two institution types DAIS covers — much of what a funder needs is already in public records, scattered and unassembled. Pulled together, it becomes a structured input:

• Conduct posture. How contentious a carrier or builder has been across comparable matters, compared to its peers.
• Resolution benchmarks. The historical range of outcomes in comparable matters — context for expected value, not a prediction for any case.
• Financial health. For carriers, public regulatory filings show solvency and reserve trends that bear on ability to pay.
• True footprint. For builders, subsidiary entities reconnected into one enterprise view, so the funder sees the whole track record, not one project LLC's slice.

Duration and collectability

Time to resolution is the hardest variable to estimate, and the defendant shapes it most. Contested discovery, endless motions, delayed mediations — these are institutional habits that repeat across matters. So is the opposite: some defendants resolve comparable matters early, which shortens the capital cycle. These are not predictions about any one case. They are historical patterns drawn from the aggregate record of how a defendant has actually behaved.

Collectability works the same way. A carrier with weakening finances is a different counterparty than a healthy one, even when the two claims look identical. Those signals sit in regular public filings — if someone assembles them.

From one case to a portfolio standard

Screening every prospective matter against the same baseline does more than sharpen single decisions. It reveals concentration: a fund backing dozens of cases across several firms and states may have quietly stacked its money against one defendant, or a cluster of defendants that behave alike. Each case looks sound alone. The correlation only shows at the level of the book — and one shock at a concentrated defendant can hit many matters at once. It is the same portfolio logic aggregate intelligence brings to a plaintiff firm's case selection, and because the same defendant can look different from state to state, multi-state comparison matters to the underwrite too.

Delivered responsibly

DAIS is a data-analytics company, not a law firm. This intelligence describes institutional conduct at the market level, drawn from public records and delivered in aggregate, anonymized form. It is not legal advice, not an investment recommendation, and it never surfaces individual claimants or claims. See the Methodology page for the approach. The full composite — conduct posture, resolution benchmarks, financial-health signals, and reconnected builder portfolios — is what Litigation Intelligence delivers to Founding Members.