Interaction risk
Extinction
That resolution of the principal claim removes or extinguishes the counterclaim before any recovery.
Hudson Litigation Defense Capital
Counterclaim finance
for corporate defendants.
A separately governed affiliate, operating behind an information barrier.
Hudson Litigation Defense Capital finances qualifying affirmative monetary counterclaims. It does not finance the cost of defending the underlying claim. That a claimant also happens to be a defendant in the same proceeding is a procedural posture, not a different kind of asset.
Scope of Capital
What the affiliate finances, and what it does not.
Within scope
- The costs of prosecuting the affirmative counterclaim.
- Expert, quantum and forensic work attributable to the counterclaim.
- Disclosure and evidence work attributable to the counterclaim.
- Filing and procedural costs of the counterclaim.
- Enforcement of a counterclaim judgment or award, where approved.
Outside scope
- The cost of defending the underlying claim.
- General legal expenses unrelated to the counterclaim.
- Pre-dispute investigations unconnected to a pleaded counterclaim.
- A defensive set-off presented as an affirmative counterclaim.
- Matters in jurisdictions where financing is not permissible.
Eligibility
The perimeter, stated plainly.
Dispute type
Commercial litigation or arbitration.
Nature of the counterclaim
An affirmative monetary claim, not a defensive set-off.
Committed capital
Published band of USD 5m to USD 15m, tested on the maximum aggregate commitment requested.
Counterclaim quantum
Ordinarily USD 15m or more, as an expectation rather than a threshold.
Counsel
Counsel engaged, or capable of being engaged, for the counterclaim itself.
Recovery position
An identifiable obligor and a credible path to collection in a recognised forum.
Jurisdiction
Financing lawful and professionally permissible in the governing jurisdiction and in each jurisdiction of expected recovery.
Commercial Position
Terms in outline.
Upfront fee
None.
Recourse
Non-recourse, payable from defined proceeds of the counterclaim.
Return
Settled in the transaction documents for the specific matter and not published.
Drawdown
Staged against agreed milestones, paid to counsel and approved suppliers.
Control
Pleadings, evidence, strategy, witnesses, counsel selection and settlement remain with the defendant-claimant and its counsel.
Global settlement
Where a settlement resolves both the claim and the counterclaim, the agreed allocation methodology in the documents applies.
If the counterclaim produces no recovery, the affiliate bears the loss and does not look to the defendant-claimant for repayment, save in respect of fraud and defined default remedies. Return arrangements are set out in writing for the individual transaction and are not published.
Interaction Risk
Risks specific to a defendant-side counterclaim.
A counterclaim sits alongside a defence, and that proximity creates risks the affiliate assesses in every matter.
Interaction risk
Set-off
That the counterclaim is treated as a defensive set-off rather than recovered as an affirmative claim.
Interaction risk
Settlement linkage
Pressure to compromise the counterclaim in order to resolve the underlying exposure.
Interaction risk
Change in the defence
A material adverse development in the defence that alters the procedural position of the counterclaim.
Interaction risk
Cost allocation
Whether counterclaim work can be reliably separated from defence work where the same counsel conducts both.
Process
Five stages, from submission to deployment.
Written submission and first contact
A preliminary enquiry is made through the affiliate’s own enquiry route and is segregated on receipt. An initial enquiry is not a formal submission, and formal intake is invitation-based. Business development makes the first written contact.
Legal clearance
Conflicts, permissibility in the governing jurisdiction and confidentiality arrangements are cleared before external diligence expenditure is incurred.
Commercial assessment
The capital position is fixed: the commitment requested, the staging of that commitment and the allocation between counterclaim and defence work.
Substantive analysis
The counterclaim is assessed as the funded asset: merits, quantum, budget, the recovery position of the underlying plaintiff and the interaction risks set out below.
Documentation, deployment and monitoring
Terms are documented and signed off before any capital moves. Capital is then drawn in stages, and the matter is monitored through resolution and distribution.
Indicative Timetable
An approximate window.
Complex matters run longer. A matter outside mandate is closed sooner.
Weeks 1 to 2
Submission acknowledged, conflicts cleared, mandate and permissibility reviewed.
Weeks 2 to 4
Confidentiality arrangements executed and the scope of materials agreed with counsel.
Weeks 4 to 10
Substantive analysis of the counterclaim, the budget and the recovery position.
Weeks 10 to 14
Commercial terms settled and put in writing.
Weeks 14 to 18
Documentation, signature and first drawdown.
Outside Mandate
What the affiliate does not finance.
Defence costs of the underlying claim.
A defensive set-off characterised as an affirmative counterclaim.
Criminal defence and purely defensive regulatory work.
Matrimonial and family proceedings.
Personal injury, mass tort and consumer class actions.
Consumer litigation.
General working capital unconnected to the counterclaim.
Counsel for the Counterclaim
Where counterclaim counsel is not yet engaged.
Many corporate defendants are introduced to the affiliate through their defence counsel. Where counsel for the affirmative counterclaim has not yet been engaged, the affiliate will engage with defence counsel under written confidentiality arrangements and may place the matter on a conditional hold, with a stated expiry, pending that engagement.
The affiliate does not act as a referral agent or broker for legal services. Counsel selection remains the defendant-claimant's own responsibility.
Institutional Separation and Confidentiality
Hudson Litigation Defense Capital is a separate legal entity from Hudson Litigation Capital, with its own capital, its own committee, its own compliance function and its own records. The affiliate relationship confers no shared capital access and no information rights between the entities.
A counterclaim lodged with the affiliate is handled behind an information barrier and is not visible in Hudson's ordinary deal flow. The affiliate does not represent that its confidentiality arrangements confer privilege, that common-interest protection arises automatically, or that its involvement will never be disclosed. Where a jurisdiction, forum or procedural rule requires disclosure, that obligation is complied with.
Enquiries
How to reach the affiliate.
Correspondence should be marked "HLCDC Enquiry" so that it is segregated on receipt. Nothing on this page is an offer of capital, and nothing on it is legal advice.
Continue
- HLCDC Leadership
Officers of the affiliate, separately staffed.
- Make a Preliminary Enquiry
A preliminary enquiry to the affiliate.
- Governance
The information barrier in its wider setting.
Counterclaim finance
Make a preliminary enquiry, in confidence.