Lawsuits are expensive. Really expensive. Most people realize this only after they’re knee-deep in discovery, staring at a legal bill that looks more like a mortgage statement than an invoice. This is where 1 of 1 funding enters the chat. It’s not your typical bank loan, and it’s certainly not a credit card advance. We’re talking about highly specialized, non-recourse capital designed for a single, specific legal claim.
Think of it as bespoke suit tailoring, but for your bank account during a marathon litigation battle.
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In the world of legal finance, "1 of 1" refers to a singular, bespoke agreement between a plaintiff and a funding firm. Unlike mass-market pre-settlement funding—where a company might churn through thousands of $2,000 "slip and fall" advances—1 of 1 funding is built for the big leagues. It’s the engine behind massive commercial disputes, patent infringements, and civil rights cases that require six or seven figures just to keep the lights on in the courtroom.
Honestly, the legal system is often a war of attrition. Whoever runs out of money first loses, regardless of who's actually right. That's a hard pill to swallow, but it's the reality of modern litigation in 2026.
The Anatomy of a Bespoke Legal Deal
When you go after 1 of 1 funding, you aren't just filling out a form on a website. You’re entering a rigorous due diligence process that would make a private equity analyst sweat. Funding firms like Burford Capital or LexShares don’t just hand out money because they like your story. They look at the "merits." They look at the "damages." They look at the "collectability."
Can the defendant actually pay if you win?
If the answer is no, the deal is dead before it starts.
A 1 of 1 funding arrangement is almost always non-recourse. That’s the magic word. It means if you lose the case, you owe the funder nothing. Zero. Zilch. They take the risk; you take the capital. Because the funder is assuming all that risk, they are incredibly picky. Most firms reject 90% of the cases that come across their desks. They want the "slam dunks," or at least the cases where the law is clearly on the plaintiff’s side.
Why 1 of 1 funding Isn't a Traditional Loan
Standard loans have monthly payments. They have compound interest that eats you alive while your case drags on for four years. They require collateral, like your house or your business assets.
1 of 1 funding doesn't care about your credit score.
The "collateral" is the case itself. This creates a weirdly symbiotic relationship. The funder becomes a silent partner in your litigation. They can't direct the strategy—that would be "champerty," an old-school legal term that basically means "mind your own business"—but they are deeply invested in the outcome. You’ll see these deals structured with "waterfall" payments. This means when the settlement check finally arrives, the money is distributed in a specific order: first to the lawyers, then the funder’s principal, then the funder’s "success fee," and finally, the rest to the plaintiff.
Sometimes these fees are a flat multiple, like 2x or 3x the investment. Other times, it's a percentage of the recovery. It depends on how much risk the funder thinks they’re taking.
The Ethical Grey Areas People Ignore
Critics of the industry often point to "maintenance and champerty." These are ancient doctrines designed to prevent wealthy people from stirring up trouble by paying for other people's lawsuits. But in most of the US, these rules have been relaxed. Courts have realized that without some form of 1 of 1 funding, most individuals and small businesses would simply be "papered to death" by giant corporations with infinite legal budgets.
It’s about "leveling the playing field."
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Still, it’s not all sunshine. There are real concerns about disclosure. Does the defendant have a right to know that a third-party funder is paying the bills? Some judges say yes, because it affects settlement negotiations. If a defendant knows the plaintiff has a $5 million war chest from a funder, they might be more likely to settle early rather than trying to outspend them.
Where the Money Actually Goes
You might think 1 of 1 funding just goes to the lawyer's hourly rate. It does, but it’s often much more complex than that.
- Expert Witnesses: In a medical malpractice or intellectual property case, a single expert can cost $500 to $1,000 an hour. You might need five of them.
- Deposition Costs: Court reporters, videographers, and travel add up fast.
- Life Expenses: If a plaintiff is too injured to work while their case is pending, 1 of 1 funding can cover their mortgage and groceries so they aren't forced to take a "lowball" settlement just to survive.
- Data Analytics: High-end funders often use proprietary AI models to predict the likelihood of a win based on the specific judge and jurisdiction.
Real-World Impact: The Gawker vs. Hulk Hogan Case
Though it’s an extreme example, the Peter Thiel-funded lawsuit against Gawker Media is the most famous instance of what happens when a "1 of 1" style investment hits the courtroom. Thiel wasn't a traditional commercial funder—he had a personal grudge—but it proved a point. Third-party capital can destroy even a major media company if the case has merit and the funding is deep enough.
In a more standard commercial setting, imagine a small tech startup whose patent was stolen by a tech giant. The startup has $50,000 in the bank. The lawsuit will cost $2 million. Without 1 of 1 funding, that startup is effectively dead. With it, they can hire a top-tier firm and fight for a nine-figure settlement.
How to Tell if You Actually Need This
Not every case is a candidate for 1 of 1 funding. If your case is worth less than $100,000, most high-end funders won't even look at it. The "unit economics" just don't work for them. They need a big enough "pie" to justify the hundreds of hours they spend on due diligence.
You need to ask yourself a few blunt questions.
Is the liability clear? If it’s a "he said, she said" with no paper trail, you’re going to have a hard time getting funded. Is the defendant "judgment proof"? If you’re suing someone who's broke, no funder will touch it. Does your attorney have a track record of winning? Funders bet on the horse (the case) AND the jockey (the lawyer).
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Actionable Steps for Securing 1 of 1 funding
If you think your case fits the bill, don’t just start cold-calling. You need a package.
First, talk to your lawyer about "litigation finance." Many trial lawyers have existing relationships with funders. They know what these firms want to see.
Second, prepare a "case memo." This isn't a long-winded story about your feelings. It’s a cold, hard look at the facts, the legal precedent, and the estimated damages. You need a clear "Theory of Recovery."
Third, be ready to share everything. The funding firm will want to see your strongest evidence and your weakest points. If you hide a "smoking gun" email that hurts your case, and they find it during due diligence, they’ll walk away instantly.
Finally, compare offers. 1 of 1 funding is a competitive market. Different firms have different "appetites" for risk. One firm might specialize in pharmaceutical cases, while another only does breach of contract. Don't take the first deal that comes along if you have a strong case. Look at the "internal rate of return" (IRR) they’re asking for and how it changes over time.
The most important thing is to move quickly. Due diligence can take weeks or even months. If you wait until your bank account hits zero, you lose your leverage. Start the conversation while you still have the breath to fight. 1 of 1 funding is a tool—use it before the other side uses your lack of funds against you.